Latest news with #R11-billion
Daily Maverick
21-05-2025
- Business
- Daily Maverick
Education and health funding slashed while fuel levy increased
From grant recipients and healthcare, to education and Home Affairs, this is an overview of the May 2025 Budget allocations. A rocky road lies ahead for social grant recipients who will see no increase in the amounts they receive over the next two years. This is just one of several changes revealed by Treasury this week in the third iteration of the National Budget for 2025. Those in the public sector who were hoping to take advantage of the early retirement programme will have to hop to it. The R11-billion allocation over the medium term has been slashed to R5.5-billion, which means the potential 11,000 employees who could have benefited has been halved to 5,500. Treasury director-general Duncan Pieterse said part of the reason for halving the allocation is that there is a process under way with the bargaining council for the current financial year. The previously projected savings of about R7-billion would also be reduced to about R3.5-billion. Slight acceleration for the fuel levy Consumers will also take a hit with a 4% (inflationary) increase to the fuel levy that will see petrol go up by 16 cents a litre, while diesel increases by 15c a litre – effective from 4 June this year. In other words, Treasury is clawing back the R4-billion relief that would have been seen had the fuel levy not increased. However, this is the first fuel levy increase since 2021. The zero-rated foods increase (on canned vegetables such as chickpeas and baked beans, edible offal of sheep, poultry and other animals, and dairy liquid blends) is now out the window. Importantly, additions to front-line services such as education, health and Home Affairs remain in place, although they have been revised downward. Healthcare The three-year allocation for health (provincial health compensation costs, unemployed doctors and goods and services) shifts down from R28.9-billion in the March Budget presentation to R20.7-billion in the Budget tabled this week. This funding will cover the employment of 800 doctors who have completed their community service, safeguard about 4,700 health posts and address shortages in medical goods, services and accruals. The May 2025 Budget overview document states that an additional R1.4-billion is earmarked for the construction of Siloam Hospital and the implementation of public-private partnership health technology at Tygerberg Hospital. Home Affairs Lines at Home affairs (Hell Affairs) are destined to remain long for the foreseeable future. While the March Budget allocated an additional R3.3-billion over three years for digitisation and 'human resource capacitation', it has been reduced to R965-million. Importantly, the line item in the 'spending additions funded over the MTEF period' now only reads 'digitisation', which means the 'human resource capacitation' or jobs or training element has been dropped. Education The additional spending for education shifts from R29.5-billion in March 2025 to R19.5-billion. This will go towards safeguarding about 5,500 teacher posts and increasing the early childhood development (ECD) subsidy from R17 per child per day to R24. The May 2025 Budget overview document then says that 'additional funding of R10-billion over the medium term will expand ECD access to an additional 700,000 children up to the age of five years old'. Defence 'The R5-billion we had proposed to allocate to the Department of Defence for its participation in the SADC mission in the DRC is reduced,' said Finance Minister Enoch Godongwana. However, the SANDF allocation for 2025/26 has been increased from R1.8-billion to R3-billion. 'This will cover the immediate costs of an orderly and safe withdrawal of our troops and mission equipment,' Godongwana said. Anticipated spending pressures Initiatives that may require funding later this year include: The withdrawal of the US President's Emergency Plan for Aids Relief (Pepfar) funding, particularly through USAID; Infrastructure projects in the Budget Facility for Infrastructure and the Passenger Rail Agency of South Africa rolling stock fleet renewal programme; Accommodating population changes that impact on the provincial equitable share allocations; Strengthening capabilities in the Office of the Chief Justice and Statistics South Africa; Political party funding and infrastructure provision for royal houses; and The National Social Dialogue. DM
Daily Maverick
15-05-2025
- Business
- Daily Maverick
Reversing austerity: How Budget 3.0 can restore educational integrity and infrastructure in South Africa.
More than 23,000 posts in education departments have been cut, and now our classrooms are paying the price for austerity. Budget 3.0 will be tabled on 21 May 2025 — a historic moment for our nation's democracy, which had until now failed to meaningfully challenge many of the National Treasury's regressive decisions. While we welcome the ruling that declared the proposed fiscal framework that contained a regressive VAT increase as unlawful, it is only the beginning. We must remain steadfast in our efforts to hold the Treasury accountable to all its constitutional obligations. The new Budget cannot continue on an austere path, which systematically dismantles the public infrastructure and services upon which the most vulnerable depend. Nowhere is the damage of austerity more visible — or more devastating — than in our social services, particularly education, where the effects are especially acute. The constitutional right to basic education — an immediately realisable right — has been eroded by years of budget cuts, staffing reductions, and chronic underfunding. Politicians often repeat the refrain that the government must 'trim the fat', but what has been slashed over the past decade is not excess — it is the very muscle of our public education system. These cuts have gutted the core of teaching and learning: fewer teachers, overcrowded classrooms, inadequate infrastructure, and limited support services. The result is a generation of learners denied not just quality education, but the tools to fully realise their potential in a democratic society. Austerity is driving teachers out of the classroom Perhaps the most devastating impact has been on our teaching workforce. As we mark Workers' Month, we are confronted with the catastrophic reality of plummeting headcounts in the public education sector. Education departments' most recent annual reports show that 477,774 posts were occupied in the 2023/24 financial year. By the end of January 2025, this had decreased to 454,640. This means that in one financial year, more than 23,000 — almost 5% — of warm bodies in the public education workforce were decimated. When including funded but vacant positions, the number rises to more than 46,000 — nearly 8.5% of the workforce stripped away. Those who remain do so under increasingly arduous conditions: overcrowded classrooms, chronic shortages of materials, and mounting administrative burdens. Many teachers now work far beyond their contracted hours, effectively subsidising the education system with their unpaid labour. Furthermore, the Treasury's R11-billion retirement incentive for public sector workers will probably accelerate this exodus by encouraging a wave of early retirements without a parallel plan to fill the gaps. This is not a profession in decline by choice — teachers want to teach. Austerity has created a crisis where experienced educators are leaving the profession in droves, while fewer young people see teaching as a viable career path. Unfunded mandates, unrealised rights It is deeply contradictory for the government to be cutting education posts while at the same time increasing its obligations to learners. Since the Bela Bill was signed into law in 2024, Grade R has become a legal obligation. Yet no corresponding funding has been allocated to support its implementation — there is no budget to increase teacher headcounts or equip schools with the infrastructure and resources needed to accommodate this expanded intake. Parliament should not pass budgets with unfunded mandates — they undermine the rule of law and put constitutional rights at risk. The underfunding of Grade R is a clear and urgent example. Budget 3.0 must end the infrastructure crisis in schools The physical infrastructure of our schools tells an equally troubling story. It has been 12 years and counting for the government to eradicate pit latrines from all schools, which were officially declared illegal under the Norms and Standards for School Infrastructure. Despite legal guarantees, many students still attend schools without adequate sanitation, a reliable water supply, or safe buildings. In 2023, the Department of Basic Education estimated that it would need approximately R42-billion each year to eliminate all backlogs and have well-functioning school infrastructure in all public schools by 2030. Even if current spending plans are protected against the VAT shortfall, the government will spend an annual average of R17.6-billion on school infrastructure over the next three years, less than half the required amount. Even more troubling is that the government amended the Minimum Uniform Norms and Standards for Public School Infrastructure to remove critical deadlines for addressing these backlogs. This shift actively retrogresses against established frameworks to safeguard the right to education as an immediately realisable one. Deadlines are essential for driving implementation, enabling proper planning, and securing ring-fenced funding. By scrapping them, the government has weakened accountability and signalled a retreat from its constitutional duties. While the rest of the world invests in equipping learners for a digital and knowledge-based future, South Africa's education system is still denied the minimum resources it requires to equip youth to actively participate and contribute to our future. We stopped the VAT hike — now we must reverse the cuts The victory against VAT increases has demonstrated that organised resistance to austerity can succeed. However, we must build on this momentum to demand not just the prevention of further cuts, but the restoration of what has been lost and investment in what should be. Our education system needs immediate, substantial increases in funding for teacher salaries and recruitment, dignified and safe school infrastructure, learning materials, and support services. Even Finance Minister Enoch Godongwana has conceded to what we have long argued: austerity has failed to achieve its goal of reducing national debt. Instead, it has shifted the burden on to poor and working-class communities through degraded public services while economic growth stagnates. If spending cuts have failed to deliver the promised stability or growth, then we must ask: why are we still sacrificing our teachers and our children's future at the altar of austerity? DM Mahfouz Raffee is a researcher at Equal Education. Matshidiso Lencoasa is a budget analyst at SECTION27. Both organisations form part of the Budget Justice Coalition.
Daily Maverick
09-05-2025
- Business
- Daily Maverick
R11bn unfinished Montrose Mega City Development housing ghost town
As Gauteng battles a worsening housing crisis, incomplete housing units near Randfontein in the West Rand remain vandalised and unoccupied. Daily Maverick photographer Felix Dlangamandla went to the ghost town on 7 May 2025. The Montrose Mega City Development, which was once touted as a large-scale solution to the province's housing backlog, has been inactive since January 2024. According to the Gauteng Department of Human Settlements (GDHS), the project was halted following the termination of its contract with SCM Developments, the appointed turnkey developer. The department cited 'financial difficulties leading to its liquidity'. The government planned to build 5,600 housing units during the project's first phase. When Daily Maverick asked about the total amount spent on both phases of the development to date, GDHS spokesperson Terry-Ann van Eck, speaking on behalf of MEC Tasneem Motara, declined to provide figures, although reports suggest R11-billion was spent. 'As the development was in its first phase at the time of termination, detailed financial information on expenditure cannot be disclosed without a formal application under the Promotion of Access to Information Act (PAIA).' In response to further queries from Daily Maverick about whether there are any plans to repair or complete the housing units, the department said: 'The Department is actively engaged in negotiations with the landowner to purchase the land outright. This acquisition will enable the Department to take over and continue the development. Upon successful acquisition, a procurement process will be initiated to appoint a new developer to resume and complete the project as originally intended.' It added that it had received 'guidance from the Provincial Treasury on securing the site. A professional security company has now been appointed on the property to prevent further illegal activities, including vandalism and unauthorised access,' said Van Eck.
Zawya
21-02-2025
- Business
- Zawya
Open source models could light African AI fire
Founder and CEO of Agile Advisory Services, Neda Smith, believes that AI could contribute up to $1.5trn to Africa's GDP. That forecast quotes a Nepad projection that has been well worn in African AI commentary. But she does shed light on current, practical use cases of the often nebulous concept. "AI is revolutionising financial services in Africa by enhancing fraud detection and streamlining credit applications,' she explains. 'Beyond finance, AI-powered platforms like and PROMPTS are empowering farmers and improving maternal healthcare, showcasing the transformative potential of AI across various sectors on the continent,' Smith continues. Financial services and banks have been quick out the blocks to grab an early technological advantage in the arms race. Standard Bank took its first strides partnering with AWS and Microsoft Azure to leverage cloud. 'Our focus on digital and cloud-based solutions has allowed us to reduce investment in on-premises infrastructure and lower capital expenditure,' Standard Bank CIO Jorg Fischer when the bank made its cloud play. 'This transition is crucial for us to remain competitive and meet the evolving needs of our customers.' Ultimately that was all a bluff as a well-placed source told Bizcommunity that the bank added to its R11-billion technology investment bill to secure high end AI hardware to help build out its services. Standard Bank declined to comment on the hardware purchase rumour. The hardware bubble popped The hardware game has since been shaken by the advent of cheaper AI development methods, epitomised by the stock market impact of China's DeepSeek. Nathan Lambert, research scientist at the Allen Institute for AI (Ai2) explained on the Lex Fridman Podcast that DeepSeek's ability to train large language models (LLMs) with limited access to advanced GPUs by optimising communication between GPUs – even going below the level of Nvidia's proprietary CUDA libraries – shows that innovation in AI doesn't always require the latest and most powerful chips. "AI has become a bit of a black box for people, much like computers were a black box to users, in the late 80s and early 90s,' says Smith about the misconceptions in the African business market. 'In some cases, AI is being perceived as a magic wand that can solve all problems.' Smith sees the rise of DeepSeek as a reset button that has levelled the playing field for African AI development. New rules of engagement Heath Huxtable, CEO of Microsoft specialist partner Braintree, shares this view and is advocating for corporates to get out of the arms race and be more considered in their approach. 'Technology adoption, even for transformative AI tools, needs to be grounded in tangible ROI. And let's be clear, ROI is not just about the money. There are also intrinsic benefits that can be measured, such as efficiencies, performance, sales and so forth,' he says. South Africa has only recently (November 2024) received the data centre upgrades needed to power the AI compute revolution when Africa Data Centres added 1,000 racks of white space to its CPT 1 facility in Cape Town. The expansion added three state-of-the-art halls and another 6MW of critical IT load alongside a first for Africa fan wall cooling unit. Electrons to feed the energy hungry 'most efficient and sustainable data centres ever built in South Africa' comes courtesy of a 12MW solar farm in the Free State. An African AI dream AI hardware reaching our shores, combined with the open source ingenuity suggests that African companies may not be bound by the same technological limitations as before. Coupled with the understanding of the need for data centres to use resources responsibly, Smith believes there's potential for the development of bespoke AI solutions tailored to the continent's unique challenges and needs. But there is a catch. 'Policymakers need to create regulations that promote responsible AI innovation while safeguarding ethical considerations, data privacy, and security,' she says.
