2019/20 Annual Report

The Annual Report is presented in terms of the provisions of Section 222 of the Constitution 1996, sections 40 and 65 of the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA) (as amended) and section 26 of the Financial and Fiscal Commission Act, 1997 (Act No. 99 of 1997) (as amended). During the year under review the Commission continued with its important constitutional mandate of furnishing high quality expert and independent advice on financial and fiscal matters regarding the equitable sharing of nationally raised revenue, particularly in building capacity among legislators. 

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2021/22 Submission for the Division of Revenue

Under the theme of “Sustainable Financing of Social and Economic Infrastructure and Services”, this Submission begins the conversation about the implications of Covid-19 for public finances. The most immediate impact on the macro-economic and fiscal framework is the substantial overall increase in government spending on health care and social protection, in particular for the most vulnerable of society. Therefore, in light of the current human, health and economic crisis levels, the Submission begins with an overview of South Africa’s pre-Covid-19 economic structure and a brief analysis of economic data for the first quarter of 2020. It then considers the fiscal implications of Covid-19, and looks at agriculture and food security, and the catalytic role of municipal services of water, electricity and sanitation.
Among the structural weaknesses exposed by the Covid-19 pandemic are the imbalances within the health care system. To this end, and given South Africa’s human development index, the Commission seeks to address structural challenges of health care financing, by proposing an evidence-based approach to pricing and costing health care, and reviewing the implications of the legislative reform for ensuring universal access of health care through the National Health Insurance (NHI) Bill of 2019 in South Africa. Lastly, the Commission examines the challenges that already exist in public family and community welfare services, which are targeted at the most vulnerable and yet are inadequately funded, in particular early childhood development and inclusive education. 

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Policy Brief 11 - Potential Financing Options for Large Cities

In South Africa large cities face a myriad of challenges including rapid urbanisation, poverty, inequality, unemployment and huge infrastructure needs. Although these are not unique to large cities, the magnitude of the challenges in large cities is greater and is increasingly becoming a major risk to the socioeconomic development of the country. The ability of cities to deal with these challenges depends, to a large extent, on their ability to generate more of their own revenues. As transfers and own revenues for large cities are heavily constrained, it is critical that cities leverage non-traditional and other innovative financing mechanisms. This policy brief summarises the findings of a study that evaluated different non-traditional revenues sources for South Africa’s large cities. Findings from the study suggest different options to enhance borrowing for large cities as well as strategies to improve public private partnership (PPP) deal flows in large cities. In addition, the study brings to the fore the value of land value capture mechanisms.

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