Small-party MP Mmusi Maimane will pinch himself to make sure he is awake over the next couple of days, as he enjoys playing an essential role in passing South Africa’s budget.
Maimane chairs parliament’s appropriations committee, which has been largely unnoticeable or useless since 1994. South Africa has never had to wonder whether the budget would pass or fail, as the ANC has always had the 50% required to pass the straightforward laws for the past 30 years.
Together with the standing committee on finance, Maimane’s appropriations committee is where the 2025 budget will be interrogated. The standing committee on public accounts, chaired by Songezo Zibi, is also paying close attention to fiscal developments instead of waiting to assess matters retrospectively.
The budget statement is accompanied by draft legislation that must be interrogated and voted on by MPs for the budget to become law. The technical process usually means up two months of being ground through the parliamentary sausage machine.
If the budget is to pass, the ANC will need the DA’s support. Should the DA vote against it, the ANC will need the support of other parties in the government of national unity — and of opposition parties such as the EFF.
Though that looks like a high-impact, low-probability event at this stage, it would be too messy to comprehend. The future of Transnet is at the heart of the 2025/26 budget, but it’s an element that the VAT debate has overshadowed so far.
Having resisted new debt, finance minister Enoch Godongwana needs a credible story for how he will ignite the economy. He will table the budget facing a voracious Transnet that is struggling to throw off the yoke of R15bn in annual debt service costs.
Godongwana — judging by his planned remarks in the not-tabled speech — has no interest in doling out money to Transnet. This differs from what the rail and ports company wants, as it has been champing at the bit for a R50bn injection. These misaligned expectations are a huge sign of what could go right and wrong in the next two years or so.
The reforms driven by Pretoria promise many opportunities for the private sector, with equity injections among the benefits for state-owned enterprises
The message from Pretoria is loud: Urgently get private sector participation. Great. But the management of Transnet is on another train on a different track altogether. It’s struggling to breathe, suffocated by debt service costs.
The Treasury is happy to provide the entity with guarantees allowing it to refinance some of it. That, however, will help only a little. New debt, even if guaranteed, still needs servicing by Transnet — and the spiral continues.
Transnet has been playing Russian roulette with its finances — shifting funds from capital spending to debt servicing. While this stops it from defaulting, it also hampers the maintenance and expansion of critical infrastructure.
So, as we focus on the price of bread — as represented by the intense discourse on VAT — Transnet has become a blind spot. But if you were to ask, what does this state-owned enterprise have much to do with the price of eggs?, the answer would be: quite a lot.
Administered prices in the transport sector, such as those set by Transnet, have been throttling the economy for years. Transnet and trade competitiveness are among the albatrosses around the economy’s neck — affecting the price of bread or eggs.
If Transnet is the new Eskom, it will need greater attention. The leaders at Transnet need the government to explain their mandate to them, or they need to take the mandate sheet to a pharmacist as if it were a badly scribbled doctor’s script. They are on a collision course.
There is a gap between what the Transport board and management want, and how the government wants things done. The board might have to close the gap proactively, otherwise its tenure will be difficult. Or it could accept the straitjacket it’s getting from the government.
The reforms driven by Pretoria promise many opportunities for the private sector, with equity injections among the benefits for state-owned enterprises. According to the aborted budget statement, the department of transport and Transnet will — in the next two months — engage the market on private sector participation.
This will include matters such as ore, chrome, coal and manganese lines, and the expansion and automation of the ferrochrome and magnetite terminal at the port of Richards Bay.
Private-sector participation is envisaged for the container and automotive sectors — including the designation of the container port systems as a regional trans-shipment hub for big shipping lines.
Also on the cards is the establishment of an independent rolling stock leasing company. These big moves require as much attention as the VAT idea while the budget goes through the sausage machine and we grapple with the new dawn of competitive parliamentary politics.
• Mkokeli is lead partner at public affairs consultancy Mkokeli Advisory.
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