MK Party responds to the ANC/DA coalition Medium-Term Budget Policy Statement

1 November 2024

We are here to respond to the Medium-Term Budget Policy Statement, or MTBPS, presented by the ANC/DA alliance. This budget, as outlined, falls severely short of addressing the economic and social challenges facing South Africa. Since 2018, when President Zuma left office, we have seen a severe deterioration across multiple economic indicators.

Today, under the leadership of President Ramaphosa and the IMF policies championed by his coalition with the racist Democratic Alliance, our country faces:

A sharp increase in the debt-to-GDP ratio, An intensifying cost-of-living crisis driving millions into deeper poverty, Insufficient investment in critical social services, and

An alarming increase in illegal immigration due to lax border control.

This alliance between Ramaphosa's ANC and the DA signals a troubling commitment to IMF-backed policies that have continually failed our people. The MT BPS, presented under the guise of "structural reforms" and "private sector participation," clearly signals an intent to defund, collapse, and privatise our State-Owned Companies.

We urge each of you to consider the facts. Let us present a factual comparison of our current economic indicators to those of 2018, underscoring how IMF-backed austerity and underfunding of critical departments under Ramaphosa have worsened social outcomes. Moreover, we will highlight how the MK Party, inspired by the People's Mandate, would budget differently to create real solutions for our economic crisis.

Let us look at the fundamental economic indicators. First, in 2018 under President Zuma GDP per capita was R82,OOO. Under President Ramaphosa's leadership, this figure has dropped to around R78,OOO in 2024. This decline reveals a shrinking economy with limited opportunities, and increasing poverty, especially for the Black majority. IMF-backed austerity has failed to increase our per capita income and has, instead, contributed to a decline in the quality of life.

Second, in 2018, South Africa's debt-to-GDP ratio was approximately 53%, which, while concerning, left room for targeted fiscal investments to stimulate growth.

However, by 2024, Ramaphosa's austerity-focused approach has driven this ratio up to a staggering 74% or higher. Despite painful cuts to health, education, and social security, debt has spiralled, limiting our ability to invest in South Africa's future. Under the MK Party's leadership, we would prioritise inclusive growth, ensuring a stronger economy that sustainably reduces debt while improving social outcomes.

Third, South Africa's Gini coefficient has risen to a world leading 0.65 in 2024, showing that inequality has deepened under Ramaphosa's administration. This statistic underscores how wealth and income remain concentrated in the hands of a few, with little progress made to uplift the marginalised Black majority. This is a direct result of economic policies that overlook transformation, employment equity and fail to support essential public services, especially those meant to uplift Black communities.

Lastly, in 2018, our unemployment rate stood at 24%. Under the current administration, these numbers have reached crisis levels, with unemployment now at 33% and youth unemployment close to 60%. IMF-backed austerity has failed to create jobs or stimulate industries that could support the youth and small businesses.

The consequences of ANC/DA/IMF austerity are not merely reflected in macro-economic indicators, they also affect other sectors that are critical to our people. For instance, our healthcare system has been chronically underfunded over the last six years. Facilities lack resources, medical supplies, and personnel due to insufficient budget allocations. This has led to poorer health outcomes, lower life expectancy, and suffering for millions, particularly those in underserved Black communities. The ANC/DA/IMF MTBPS fails to address this crime against our people.

The ANC/DA/IMF destruction is not only with health, but they also seem be quite determined to destroy our education system as well. Education is foundational to our economy, yet funding cuts have reduced per-student spending by about 4% since 2018. Schools are inadequately equipped, leading to poor learning outcomes and an unskilled workforce. Neglecting education limits opportunities for our youth, the backbone of our future workforce and entrepreneurs. The ANC/DA/IMF MT BPS continues along this path, condemning many of our Black children to a life of misery.

Over the last six years, social grant increases have failed to keep up with inflation, leaving the most vulnerable citizens unable to meet their basic needs. Food prices nd fuel costs have surged by over 30% with electricity tariffs also more than doubling over the last six years, however, the ANC/DA/IMF MTBPS fails to protect our children and the elderly.

Funding cuts in the main budget, which are not fully rectified by this ANC/DA/IMF MTBPS, have left communities vulnerable. Violent crimes and gender-based violence are on the rise, and the lack of trained police officers and community resources has left our people feeling unsafe. Moreover, insufficient border control budget allocations have led to increased unregulated migration, adding strain on our already limited healthcare, education, and social services. Rather than addressing this pressing issue, the MTBPS has continued to neglect Home Affairs and immigration policy, fuelling social tensions.

The ANC/DA alliance focuses on short-term fixes like the Two-Pot Retirement System and Gold and Foreign Exchange Contingency Reserve Account (GFECRA) reform rather than pursuing transformative policies. These measures offer temporary relief but fail to address South Africa's deeper economic issues. The Two-Pot system may further lower the country's already minimal savings rate, which stands at a record low of 12.7% of GDP, limiting future investment. Meanwhile, the R150 billion from GFECRA covers less than 10% of the interest burden over the next three years. These initiatives fall short of the fundamental reforms needed to drive sustainable, transformative growth.

MK Party's approach to South Africa's economic crisis, rooted in the People's Mandate, rejects these incremental, IMF-backed measures. Instead, we advocate for a transformative strategy, comprehensively outlined in our People's Mandate, focused on land reform, financial repression, human capital development, infrastructure investment, and economic diversification.

Land reform and financial repression will be implemented through non-budgetary actions, allowing the budget to prioritise human capital, R&D, infrastructure, and diversification—areas neglected by the ANC/DA alliance. This comprehensive approach aims to drive sustainable growth, job creation, and an improved quality of life for all South Africans.

First, MK Party will dramatically increase funding for education, healthcare, and social services. These investments in human capital are the backbone of sustainable economic growth, creating a skilled, healthy workforce and fostering resilient communities.

Second, infrastructure is key to productivity. We will prioritise public investment to 15% of GDP. These investments, through our revitalised SOCs, will target nuclear energy, transport networks, and digital connectivity to boost productivity and attract the restoration of dignity. It protects the property rights of those who historically stole the land and ensures the continued marginalisation of the majority. Under MK, we would scrap this Constitutional supremacy in favour of one that prioritises the dignity and sovereignty of the people. We believe that only by returning to Parliamentary Sovereignty can we enact laws that truly reflect the will of the people and restore their dignity through land reform and the empowerment of traditional leadership.

The dysfunctionality of the so-called GNU is also illustrated by its confusing foreign policy messages and statements in the current phase of the global balance of forces.

The contradictory statements of the GNU allies in their approach to Russia and President Vladimir Putin are a cause for concern. It is utterly unacceptable and nauseating for the DA to distance the South African government or parts of it from an otherwise solid and sound historical and present relationship with Russia. South Africa has no enmity against President Vladimir Putin. He remains the good friend and ally of the global south and the African continent in particular. Russia constitutes the core company of the USSR, which provided solid political, ideological, diplomatic, and military support to the struggle against apartheid and colonialism.

The relationship between South Africa and Russia is built on solid foundation of anti-colonialism and pursuit for common prosperity. Since 2010, South Africa and Russia have been common members of BRICS, alongside the progressive nations Brazil, India, China and now other progressive nations and counties of the world. It is therefore unacceptable for the DA to send mixed signals to the global community about South Africa's cordial relationship with the Russian Federation. The unacceptable statements of the DA also reveal the irreconcilable principles amongst members of the so-called Government of National Unity. These irreconcilable differences and principles are not correct for the image, stability, and integrity of the country. The countrVs integrity is damaged globally because the white comment of the so-called GNU is throwing mud at South Africa's allies in the global balance of forces.

The leadership of uMkhonto weSizwe will over the coming week be visiting all Provinces to present the Constitution and assess the presence of the organisation in each and every region and sub region. We will over the next few weeks be circulating the MKP Constitution in all South African languages. Members of the MKP are directed to workshop the Constitution and massive recruitment.

investment. Infrastructure will serve as a cornerstone for job creation and economic growth.

Third, the MK Party budget will fund economic diversification and entrepreneurial risk-taking. Relying solely on traditional mining and agricultural sectors leaves us vulnerable. MK Party will implement policies encouraging diversification into advanced manufacturing and tradeable services. We will support future-ready growth through nuclear and green initiatives.

Lastly, by increasing funding for immigration services, we can ensure effective border management and support regulated immigration, benefiting both the economy and public services while fostering strong community relations.

In conclusion, the ANC/DA alliance's IMF-backed policies have left South Africa stagnating, with declining social outcomes, a worsening cost-of-living crisis, and a failing economy. The two-pot retirement system and GFECRA are temporary measures that cannot resolve the deeper crisis.

The MK Party, however, has a clear plan inspired by the People's Mandate. By investing in our people, infrastructure, and economic potential, we will build an economy that serves all our people and lays the foundation for a prosperous and equitable future for South Africa.

Issued by Nhlamulo Ndhlela, Head: Media and Communications, 1 November 2024