Eastern Cape economic endeavours looking good this financial year

Goodthings arehappeningin EasternCape agriculture, manufacturingand construction this financial year, butsmaller industries need to be linked into the mainstream.

The Eastern Cape provincial Treasury expectsthat theprovincewillbenefit fromthe agriculture, manufacturingand construction sectors during the 2023/2024 fiscal year.

The provincial Treasury said the outlook for agriculture was remarkablypositive, but cautioned that sustaining underperforming subsectors remained a challenge.

FinanceMEC MlungisiMvokosaid itwas imperative to expand andsustain links between emerging farmers,agribusinesses and mainstream agricultural value chains.

Hesaid thatmanufacturing, particularlyin theautomotive sector, remained,as it had for years, the backbone of the province.

Between 2018 and2022, theoriginal equipmentmanufacturers (OEMs)

Isuzu, Volkswagen, Mercedes-Benz and Ford created more than 10,000 Eastern Cape jobs.

Fiscal support will becrucial for economic stabilisation and growth.

Theprovincial Treasurysaidthis wouldrequire a balancing act in allocating sufficient resources to economic recovery, reconstruction and relief efforts.

Budget allocations will be underpinned by the following principles:

Resourcing economicdevelopment initiatives while protecting social services;Strengtheninggovernment capacityto implementinfrastructureprojectsand deliverservices;andEncourage good governance and transparency to realise value.

Fortunately, thenational governmentwill notbeimplementingany budgetcutsinthe coming medium term economic framework (MTEF).

In the 2023/2024 financial year, the Eastern Cape’s total budget is R89.6bn, made up of the provincial equitable share allocations of R73.2bn, conditional grants of R14.6bn and R1.6bn own receipts

Formal manufacturingin theprovince employedabout 167,000workersin thefourth quarterof 2022,representing anet gainof 52,000 jobsin thesector comparedwith the fourth quarter of 2021.

Treasurywasofthe viewthatthesenumbers could have been stronger, had it not been for weak global demand,constraints in domestic supply and logisticschains, and the high level of load-shedding.

It attributed positive trends in construction toincreased capitaloutlays andinfrastructure expenditure by the government.

Several proposed investments are also excellent news for the construction sector.

Since 2013,the Eastern Capehas nominally gained R6bnfor itsfiscus and about R12.2bn over the MTEF.

The province’s fiscal consolidation strategy is yielding benefitsin theprevailing economic conditions.

Priorities remain cost containment measures inkey service delivery areas, whileimproving provincial governance and oversight.

The provincialTreasury saidthat zerobasedbudgeting andexpenditureperformancereviewmodels wouldalignspending with strategic outcomes and service delivery.

“Inthe 2023/2024financialyear, theEastern Cape’s total budget is R89.6bn, made up of theprovincial equitableshare allocationsof R73.2bn, conditional grants of R14.6bn and R1.6bn own receipts.

Total payments are R91.6bn, then a budget deficitof aboutR2bn,butR2.7bn inprovincial reserves are available to finance this deficit.