Frontline Africa Advisory

Weekly Political and Economic Review 22 February 2019

1. 2019 Budget Speech 

– On Wednesday the 20th of February 2019 Finance Minister Tito Mboweni delivered his maiden Budget Speech;
– He announced that government had set aside R69 Billion for the next 3 years to support Eskom;
– Denel was granted a R1 billion Guarantee; 
– SAA’s guaranteed debt was increased by R6,2 Billion;
– Mboweni pointed out that all financial support to SOE’s would be conditional on the appointment of a Chief Reorganisation Officer (CRO) to be appointed jointly by the Department of Finance and the Department of Public Enterprises;
– The following measures were also announced:

1.2 Towards Improving the Education System and Skills Development 
R30 billion was allocated to building new schools and maintaining school infrastructure. R28 billion was added to the School Infrastructure Backlogs Grant. Government committed to spending R111.2 billion to fund higher education and training for deserving student coming from poor and working-class families,

1.3 Towards Improving the Living Conditions of the Poor:
Government allocated R567 billion for social grants. In the health sector, R2.8 billion was reprioritised for filling public health sector vacancies via a ring-fenced grant which can only be used for the set purpose. R319 million was allocated to eliminate malaria in SA,

1.4 Access to Housing
950 million was allocated to the “Our Help to Buy” subsidy, which seeks to help first time home buyers to purchase homes,

1.5 Economic Infrastructure
R3.5 billion was allocated to the South African National Road Agency Limited to improve non-toll roads,

1.6 Combating Crime and Corruption
National Treasury and Department of Justice will work swiftly to support the establishment of the new Investigative Directorate in the NPA, No funds have been allocated to this function as yet. 

1.7 Strengthening the Capacity and Capability of the State
National Treasury will lead a process to  encourage payment for public goods, especially by Municipalities and government entities who owe Eskom and billions. National Departments will also be leaned upon to service their municipal bills to ease the burden on these entities. 

2. Political Party Reactions to the Budget Speech
  2.1 DA leader Mmusi Maimane said Mboweni “minced his words” about SOE’s by saying we should decide what we’re going to do with these as if he is not part of the government. Mr Maimane expressed his disappointment at what he regards as a lack of a plan by government to grow the economy and deliver jobs for the people;

2.2. EFF leader Julius Malema slammed Mboweni for raising the Child Support Grant by R10. Malema also felt that government could have lowered the VAT rate back to 14% after it was hiked last year;

2.3 The ANC welcomed government’s plans to dispose of assets owned by SOEs that are not core to their business operations, and said the budget would stimulate the economy, as would government spending on public infrastructure would continue.

3. Update on SA Priority Bills

– Finance Minister Tito Mboweni, tabled the following Bills in Parliament ;

1. Division of Revenue Bill;
2. Appropriation Bill;
3. Public Audit Excess Fee Bill;

4. Commissions of Inquiry 

4.1 State Capture Commission of Inquiry:

4.1.1 On 18 February 2019 former Treasury Director-General Fuzile Lundisa gave testimony at the State Capture Commission;

4.1.2 Fuzile told the Commission that the frequent change of Ministers at Treasury during former President Jacob Zuma’s tenure affected the functioning of the organisation;

4.1.3 Fuzile told the Commission that if Former President Jacob Zuma’s proposed ‘nuclear deal’ had gone through, government would have breached the expenditure ceiling it set for itself;  

4.2 Mokgoro Inquiry: Advocate Lawrence Mrwebi’s Testimony

4.2.1 On  the 19th February 2019 suspended Special Director of Public Prosecutions Advocate Lawrence Mrwebi responded to his detractors and accusers after taking the stand for the first time at the Mokgoro inquiry;

4.2.2 Mrwebi painted himself as a victim when questioned about his involvement in the trial of former Police Commissioner Jackie Selebi and his withdrawal of charges against former Crime Intelligence boss Richard Mdluli;

4.2.3 He rejected claims that he helped Selebi escape prosecution and denied claims that he protected Mdluli;

4.2.4 He argued that his difficulties in the National Prosecuting Authority started in 2004 when he reported abuse of the Scorpion’s slush fund.  

4.3 Advocate Nomgcobo Jiba’s Testimony

  4.3.1 On 21 February 2019, Deputy Prosecutions Head Advocate Nomgcobo Jiba took stand to give testimony about  her role in the arrest of Prosecutor Gerrie Nel, the Richard Mdluli matter as well as the application for her to be struck from the Roll of Advocates;

4.3.2 In response to the accusation against her for authorising the racketeering case against former KwaZulu-Natal Hawks Head Johan Booysen, Jiba insisted that there was enough evidence to support the racketeering case against Booysen;

4.3.3 She also denied being paid any money by Angelo Agrizzi, Linda Mti, and Gavin Watson from Bosasa;

4.3.4 She stated that she knew General Mdluli as an ordinary police officer, and that her co-operation with him in the case against Gerrie Nel was part of a legitimate police investigation.

5. Political Party Manifestos

5.1 The United Democratic Movement (UDM) launched its 2019 Elections Manifesto in Port Elizabeth on the 16 February 2019. The UDM promised the following:
– Introduce a better healthcare system linked to other social government clusters like social welfare, water and sanitation;

– Make additional funding available to ensure that every school has the required learning resources, delivered on time,

– Reopen teacher training colleges and impose national standards for teachers to provide the highest level of professionalism,

– Bring back school inspectors to deal with erratic attendance by pupils and teachers,
– Professionalise the criminal justice system, and

– Launch a massive initiative focusing on job creation through infrastructure maintenance and development.

 5.2 The African Christian Democratic Party (ACDP) also launched its election manifesto in the Western Cape on Saturday;

– The party will run its election campaign under the “Unite, Build and Grow”

– Crime, education, unemployment and economic growth are the focus of their manifesto;

– Reverend Kenneth Meshoe, stressed that with a Godly government in power, criminals would fear the law;

– Prayer and scriptures would be restored in the schools;

– Reverend Meshoe stressed that their party would ensure an education system and syllabus similar that provided by both Cambridge University and Zimbabwe.

6. North West ANC Peace Broker

6.1 ANC President Cyril Ramaphosa has taken it upon himself to help bring about unity and stability in the embattled North West province;

6.2 ANC acting Spokesperson Dakota Legoete confirmed that Ramaphosa would be part of a Rapid Response Team established two weeks ago, which includes National Executive Committee members Dr. Nkosazana Dlamini-Zuma, Mr. Sdumo Dlamini and and Ms Jessie Duarte;

6.3 He went on to add that the North West ANC was one of the party’s problem areas and that Ramaphosa would be able to use his experience as a skilled negotiator and mediator to assist to bring about stability.

7. President Ramaphosa’s Address of the House of Traditional Leaders

7.1 Addressing the opening of the National House of Traditional Leaders in Parliament on Tuesday the 19th February 2019, President Ramaphosa celebrated Traditional Leaders;

7.2 He referred to them as an important part of society;

7.3 Ramaphosa acknowledged Traditional Leadership as a constant reminder of who we are as a diverse country;

7.4 He further acknowledged the significant role that Traditional Leaders could play in the economic development of South Africa;

7.5 He mentioned that the Customary Initiation Bill signed into law was the first step in the eradication of initiate deaths.  

8. Bosasa Files for Liquidation

8.1 On 18 February 2019, African Global Operations, formerly Bosasa Operations, announced that it was filing for voluntary liquidation following the closure of its bank accounts;

8.2 The Company’s main bankers closed its accounts due to heightened reputational risk following the testimony of Angelo Agrizzi at the  Zondo Commission of inquiry into allegations of state capture;

8.3 The union representing Bosasa workers was shocked by the liquidation. It has requested a meeting with Bosasa’s management to find out what will happen to the employees;

8.4 The DA welcomed Bosasa’s voluntary liquidation and hoped this would be accompanied by a plan to recoup the billions stolen from taxpayers by the Bosasa;

8.5 The ANC called for the banks to keep the accounts of Bosasa open to allow employees to receive their salaries.

9. MP’s Vote to Dissolve the National Assembly

9.1 In a unanimous vote, the National Assembly adopted a motion to dissolve the Parliament  in terms of Section 50 (1) of the Constitution on Thursday the 21 February 2019;

9.2 The dissolution comes before the expiry of its term on May 20, 2019;
9.3 South Africans have until the close of business on Tuesday 26 February 2019 to register to vote.


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