Civil Engineering April 2022 | Vol 30 No 3

40 April 2022 Civil Engineering J ammine cautioned, however, that servicing the national debt was becoming increasingly onerous and now accounted for 14% of government expenditure. He also expressed the view that there was nothing in the budget “to make one believe sustainable growth will improve forthwith”. Jammine congratulated Finance Minister Enoch Godongwana for making a commitment to increased spending on capital assets while at the same time at- tempting to curb the growth in the public sector wage bill. “We’re now seeing an attempt to slow down the compensation of employees as a percentage of the overall tax bill and to increase the amount of investment in capital assets,” he said. Jammine was the main speaker at the event and reviewed both the global and local economy. Sharing the stage with him was Trevor Manuel, who served as South Africa’s Minister of Finance from 1996 to 2009, making him the longest serving finance minister in South Africa’s history. Manuel provided valuable and insightful commentary, based on his intimate knowledge and experience. Manuel lamented the “ravages of state capture”, saying it was not just about corruption but also the destruction of institutional capacity. As an example, he noted that the South African Police Service (SAPS) would be underspending its budget in the 2021/22 fiscal year by around R20 bil- lion, giving the lie to the often-heard claims that the SAPS is underfunded. He added that the situation was even more chaotic at provincial and municipal level. On the challenge of water supply, he questioned how it was possible that one of the major metros in the country – Gqeberha – had failed to maintain its water infrastructure. He also referred to “this horrible phenomenon called the construction mafia”, which has meant that the pricing of contracts cannot be realistic and that projects sometimes cannot commence, never mind be completed. GLOBAL REVIEW Reviewing the global economy, Jammine noted that it had grown by 5.9% in 2021 with the IMF predicting that this figure will fall to 4% in 2022 and 3.8% in 2023. By contrast, South Africa showed 4.6% growth in 2021, well below the global average, with the IMF forecasting that this will drop to 1.9% in 2022 and a paltry 1.4% – the lowest of any major economy – in 2023. “Since 2009 South Africa’s growth trajectory has lagged that of the world economy,” he said, adding that while activity in the world economy is back to the levels seen before the onset of the Covid-19 pandemic, this is not the case in South Africa, mainly due to structural factors that inhibit growth. These structural impediments include skills shortages, state capture and corrup- tion, cadre deployment, the deterioration of SOEs, lack of infrastructural invest- ment, over-regulation and non-payment for work, and labour market restrictions. On the subject of debt, Jammine told the audience that government debt to GDP ratios worldwide are “quite ter- rifying” with US debt, for example, now amounting to between 120% and 130% of GDP. He also noted that since 2020, the US Federal Reserve System has injected a massive stimulus recovery package of around USD$5 trillion into the economy to counter the economic effects of Covid‑19, and that other countries had followed suit. The result is sharp upward pressure on prices. Top economist labels national budget “highly satisfactory” Speaking at AfriSam’s recent National Budget Breakdown function, an annual event now in its fifth year, Dr Azar Jammine, director and chief economist of Econometrix, gave a thumbs up to the 2022 budget, saying it was “highly satisfactory with no harm”. L to R: Richard Tomes, sales and marketing executive at AfriSam; former finance minister Trevor Manuel; Dr Azar Jammine, director and chief economist of Econometrix; AfriSam executive chairman and CEO Erick Diack