“The KZN Budget and its Impact on the Economy of the Province” was the topic at a public discussion hosted by the School of Accounting, Economics and Finance.
The panel at the event, which attracted both academics and students, comprised senior members of the Provincial Treasury; economist, Mr Jacob Twala; the Treasury’s Head of Department, Mr Simiso Magagula; Chief Director of Public Finance, Ms Tanya Stielau, and the Deputy Director General of Fiscal Resource Management, Ms Neli Shezi.
The presentation provided insights into factors the Treasury takes into account when drafting the Budget.
Twala’s presentation, titled: “KZN Budget and its Impact on the Economy of the Province”, focused on key issues such as the fluctuating oil price, currency risks, productivity and labour remuneration, an economic review and outlook for KZN, a sector analysis and a global and national economic review and outlook.
‘Countries in BRICS are in recession which is a problem because we trade with these countries and when they perform badly we are also affected,’ said Twala. ‘Our economy is concentrated on the service sector but we are not exporting. Agriculture and manufacturing are the main concerns as their contribution to the GDP is going down. These are the challenges we face and we need to find solutions for our country to move forward,’ he said.
Stielau’s presentation involved a fiscal outlook of KZN’s approach in dealing with the impact of budget cuts.
‘Lower economic growth implies among other things: lower tax revenue collection by government, increase in taxes, rising inflation and interest rates, lower real personal disposable income, pressure on consumer spending, currency depreciation, limited export demand, particularly for manufactured goods, and fewer employment prospects.
‘A reprioritisation exercise required Treasury to look at combating wasteful and inefficient spending to ensure that vital services to rendered people are not compromised,’ she said.
The panel then met with the Macroeconomics Working Group (MWG), a body of economists comprising academic staff and postgraduate students whose mission is to advance and develop research in the field. The group presented research ideas aimed at exploration in collaboration with the Treasury.
Discussed were the negative impacts crime has on economic growth as it discourages investment; education in KZN; a strategy that would modernise economic agricultural activities and employment versus unemployment.
Shezi said the questions raised by the group were highlighted on Treasury’s research agenda and finding answers would assist Treasury in reshaping its thinking.
The School’s Acting Dean, Dr Mabutho Sibanda, said the discussions were vital for cementing relationships between academia and industry.
‘Let us think of ways of building mutually beneficial partnerships. My plea is for us to join forces in research and empower our academics and students through brainstorming and collaboration,’ he said.