After doing a more detailed analysis of the estimates provided in the 2023 Budget, with a focus on infrastructure, we do believe that the Budget is a more infrastructure friendly budget compared to last year. Challenges however remain in terms of actual expenditure that still requires some form of intervention by national government. Some departments are doing better than others, but overall, billions are still being left unspent. Although the budget provides a good breakdown in terms of infrastructure spending for the various departments, with conformity in the reporting between the departments a major plus, it is a challenge to isolate the expected spending that will directly benefit the construction sector. A closer look at capital expenditure towards buildings and other fixed structures does however give a more realistic view, compared to the broader infrastructure estimates that includes other no-building capital items, that we hope the reader will find useful. We look forward to the shakeup in government departments as promised by President Ramaphosa in his SONA address, as without an effective government, that includes accountability, the improved budgetary allocations will more than likely not materialise. The more effective reporting tools to be introduced during 2023 and 2024 is also welcomed and we will continue to provide feedback on how national, provincial, and local governments perform in terms of actual expenditure within the various departments.
This will arguable be one of the most difficult years for the South African economy and it is encouraging that government, through its infrastructure programme, may be able to play a counter cyclical role as it is supposed to. Undeniably so much more is needed to restore the infrastructure asset base in the country, and the estimates provided, is a mere drop in the ocean. Involving the private sector in infrastructure development is now fast becoming a reality, another plus for this year’s budget. So overall we give it a cautionary thumbs up.
Please do not hesitate to contact us if you require any further, or more detailed, information on a particular sector or department.
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| PULSE 2023 BUDGET and implications for the Construction Sector | |
