Optimizing Investment Strategies for Future Growth

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Explore effective investment strategies to maximize growth potential and achieve financial goals. Gain insights on market trends, risk management, and portfolio diversification. Prepare for a successful financial future with expert guidance and strategic planning.


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Optimizing Investment Strategies for Future Growth

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  1. Presenter: Dr Mampho Modise 2022 SECOND ADJUSTMENTS APPROPRIATION BILL Date: March 2023

  2. 2 Introduction Section 30(1) of the Public Finance Management Act (PFMA), No 1 of 1999, states that the Minister of Finance may table an adjustment budget in the National Assembly as and when necessary Section 30(2) further states that the adjustments budget may provide for: Significant and unforeseeable economic and financial events affecting the fiscal targets set by the annual budget Unforeseeable and unavoidable expenditure recommended by a committee of Cabinet and through section 6 of the Appropriations Act Any expenditure in terms of section 16, which governs the use of funds in emergency situations Money to be appropriated for expenditure already announced by the Minister during the tabling of the annual budget The shifting of funds between and within votes Utilisation of unspent funds under a main division of a vote to defray excess expenditure in another main division, in terms of section 43 of the PFMA which governs the use of virements and section 5 of the Appropriation Act; and The roll-over of unspent funds from the preceding financial year 2

  3. 3 Introduction Clause 2 provides as follows: 2. (1) Adjustments to appropriations by Parliament of money from the National Revenue Fund for (a) expenditure approved in terms of section 6 of the Appropriation Act, 2022, in the 2022/23 financial year to votes and the main divisions within a vote, are set out in the Schedule; and (b) the requirements of the State in the 2022/23 financial year to votes and the main divisions within a vote, and amendments to the purposes that are specified, are set out in the Schedule. (2) The spending of appropriations envisaged in subsection (1) is subject to this Act, the Appropriation Act, 2022, and the Public Finance Management Act. (3) (a) Despite the effective date of this Act, the appropriations referred to in subsection (1)(b) and the expenditure thereof, incurred by 31 May 2023, must be regarded as appropriations and expenditure for the 2022/23 financial year. (b) A request for roll-over envisaged in the Public Finance Management Act to any unspent funds of an appropriation referred to in subsection (1)(b) may be submitted on or before 31 May 2023. 3

  4. 4 Introduction The projected additional revenue enables government to respond to some immediate spending pressures while continuing to stabilise the public finances Revisions to 2022/23 non-interest expenditure since 2022 Budget 2022/23 R million Non-interest expenditure (2022 Budget) 1 673 450 Upward expenditure adjustments 77 419 2022 MTBPS 54 117 30 014 Special appropriation1 Other allocations in the AENE 2 24 102 Second adjustments appropriation 23 302 South African Airways 1 000 South African Post Office 2 400 2022/23 public-service wage increase 14 602 Political parties fund 300 Land Bank section 6 provision 5 000 Downward expenditure adjustments -54 039 Projected underspending -19 427 -34 613 Other downward adjustments3 Revised non-interest expenditure (2023 Budget) 1 696 829 Change in non-interest expenditure from 2022 Budget 23 379 4

  5. 5 Public-service wage increase Additional funding for the salary increases (R'000) Police Defence Correctional Services Justice and Constitutional Development Higher Education and Training Agriculture, Land Reform and Rural Development Home Affairs International Relations and Cooperation Office of the Chief Justice Forestry, Fisheries and the Environment Statistics South Africa Parliament Trade, Industry and Competition Employment and Labour Mineral Resources and Energy Health Basic Education Public Works and Infrastructure Transport Social Development 1 891 453 802 585 Cooperative Governance 426 368 Science and Innovation 370 476 Human Settlements 222 750 The Presidency 104 548 Tourism 92 274 Communications and Digital Technologies 81 810 Planning, Monitoring and Evaluation 70 565 Sport, Arts and Culture 56 920 Public Service and Administration 46 909 Government Communication and Information System 37 068 Public Service Commission 34 379 Independent Police Investigative Directorate 33 587 Public Enterprises 29 001 Small Business Development 24 754 Women, Youth and Persons with Disabilities 16 227 Military Veterans 15 920 Civilian Secretariat for the Police Service 15 833 Traditional Affairs 15 531 National School of Government 12 523 11 962 11 652 11 400 10 777 10 595 10 544 10 325 9 328 8 753 7 092 6 302 5 280 4 780 4 460 3 656 3 609 3 112 3 028

  6. 6 South African Airways To exit business rescue, a settlement agreement was reached between the rescue practitioners and the airline s creditors providing for a gradual payment of historical debts. R1 billion is allocated to assist with outstanding historical debts. The conditions are as follows: 1. All government guarantees to SAA will be cancelled 2. Takatso to provide proof of funds for the Strategic Equity Partner transaction 3. A NT review of the SEP agreement to ensure it does not give rise to future fiscal obligations Current Payments Interest and Rent on Payments for Capital Assets Payments for Financial Compensation of Employees Goods and Services Transfers and Subsidies Vote Main Division Land Assets 10 Public Enterprises 1 005 280 5 280* 1 000 000 Drive investment, productivity and transformation in the department s portfolio of state-owned companies to unlock growth, drive industrialisation, create jobs and develop skills. Purpose: 1 Administration 2 892 2 892 2 State-owned Companies Governance Assurance and Performance 943 943 3 Business Enhancement, Transformation and Industrialisation 1 001 445 1 445 1 000 000 Of which South African Airways Limited: Purchase of equity Settlement of business rescue plan obligations 1 000 000**

  7. 7 South African Post Office SAPO was allocated a cumulative amount of over R7.3 billion between 2016/17 and 2018/19 Despite these equity injections, SAPO has not emerged from its present financial weakness NT has engaged with the DCDT to finalise a credible turnaround plan for the entity The conditions are as follows: The accounting authority and management of SAPO be held accountable for the decisions taken to withhold statutory and other payments deducted from employees salaries and not paid over to the relevant authorities Given SAPO s weak track record to implement its turn around plans, before further funding is considered to implement the new strategy, the Minister of Communications and Digital Technology should consider placing SAPO under administration there should be at least an oversight committee established by NT and DCDT Aligning the future of SAPO with the results of the market study and the policy objectives set out in the ICT White Paper SAPO must begin selling all the non-core assets including properties at market rates

  8. 8 South African Post Office Current Payments Interest and Rent on Payments for Capital Assets Payments for Financial Compensation of Employees Goods and Services Transfers and Subsidies Vote Main Division Land Assets 30 Communications and Digital Technologies 2 410 595 10 595* 2 400 000 Create an enabling environment for inclusive growth in the ICT sector by developing policies and legislation that promote infrastructure investment and socioeconomic development. Purpose: 1 Administration 4 947 4 947 2 ICT International Relations and Affairs 604 604 3 ICT Policy Development and Research 987 987 4 ICT Enterprise and Public Entity Oversight 2 400 985 985 2 400 000 Of which Public corporations SA Post Office Limited: Recapitalisation 2 400 000** 5 ICT Infrastructure Development and Support 1 441 1 441 6 ICT Information Society and Capacity Development 1 631 1 631 * Expenditure authorised in terms of section 6(1)(c) of the Appropriation Act, 2022 (Act No. 7 of 2022) and is Specifically and Exclusively Appropriated

  9. 9 The Land Bank The amount of R5 billion is approved to the Land Bank with the following conditions: a. LB to provide assurance of compliance with Section 38(1)(j) of the PFMA. If such confirmation cannot be provided, the funds will be transferred on condition that remedial measures are put in place to ensure LB can establish effective financial management and internal controls; b. The Land Bank must provide with evidence that it will be able to ringfence or safeguard the R5 billion from any legal action by the lenders; c. NT and LB must enter into an agreement regarding the business plan and operationalisation of the blended finance portion of the R5 billion; d. LB must provide written confirmation that neither the initial equity allocation for blended financing, nor any future cash flow from this programme will form part of the cash sweep to repay the amortizing note issued to unguaranteed lenders; e. LB must use a minimum of R3 billion for the blended finance programme and a maximum of R2 billion to cure its default position; f. The Board must ensure that the R5 billion is utilised only as specified and approved by the Minister as stated in these conditions

  10. 10 The Land Bank Current Payments Interest and Rent on Payments for Capital Assets Payments for Financial Compensation of Employees Goods and Services Transfers and Subsidies Vote Main Division Land Assets 8 National Treasury 5 000 000 5 000 000 Support economic growth and development, good governance, social progress and rising living standards through the accountable, economical, efficient, equitable and sustainable management of public finances, the maintenance of macroeconomic and financial sector stability, and the effective financial regulation of the economy. Purpose: 4 Asset and Liability Management 5 000 000 5 000 000 Of which Land and Agricultural Development Bank of South Africa: Purchase of equity 5 000 000*

  11. 11 Political party funding Additional allocation Total 2019 MTEF Additional allocation Total 2020 MTEF Additional allocation Total 2021 MTEF Additional allocation Total 2022 MTEF Additional allocation Total 2023 MTEF 19/20 20/21 21/22 22/23 23/24 24/25 25/26 Total 158 166 176 166 176 180 167 171 172 500 522 510 536 1 058 300 171 178 187 342 350 366 300 642 350 366 382 1 740 Allocations for Political party allowances these are allocations to Parliament 463 454 454 513 516 539 561 3 500 There were no revisions to allocations to Parliament

  12. 12 Political party funding Current Payments Interest and Rent on Payments for Capital Assets Payments for Financial Compensation of Employees Goods and Services Transfers and Subsidies Vote Main Division Land Assets 5 Home Affairs 392 274 92 274* 300 000 Efficiently determine and safeguard the identity and status of citizens. Regulate immigration to ensure security, promote development and fulfil South Africa s international obligations. Purpose: 1 Administration 16 220 16 220 2 Citizen Affairs 53 822 53 822 3 Immigration Affairs 20 414 20 414 4 Institutional Support and Transfers 301 818 1 818 300 000 Of which Departmental agencies and accounts Represented Political Parties Fund: Operations 300 000

  13. 13 Thank You

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