Four ministers are enough for SA, economist argues amid Budget crisis

Johannesburg

Cape Town – Economist Dawie Roodt has called for a drastic reduction in South Africa’s Cabinet, proposing that only four ministries are needed: Social, Economic, Security, and Finance.

According to Daily Investor, Roodt suggests that director-generals, who already oversee much of the government’s functions, should be given more authority within this streamlined structure.

“This is certainly possible, and everything can fit under those four ministries. You can have more deputy ministers, but particularly have more director-generals running specific departments under the ministers,” the report quoted him as saying.

He added, “The Cabinet should be much, much smaller than it currently is. It is very bloated and, in most cases, the director-generals do all the work, and the ministers are only political heads.”

South Africa’s executive branch currently comprises 75 members, including 32 ministers and 43 deputy ministers.

Budget shortfall

Roodt’s remarks come as South Africa grapples with a R60 billion budget shortfall, forcing the government to choose between raising taxes or cutting spending.

Adding to the uncertainty, deep divisions within the coalition government threaten the passage of the newly tabled national budget. Finance Minister Enoch Godongwana’s budget has already faced backlash, with key coalition partners rejecting it for the second time.

On Wednesday, Godongwana unveiled a revised budget that proposed a smaller VAT increase than initially planned. However, the Democratic Alliance (DA) and other political parties swiftly rejected it.

This leaves the ANC in a difficult position, as it must secure support from at least one of the three largest opposition parties to pass the budget.

The minister presented the revised budget to parliament just three weeks after his initial version was scrapped at the last minute due to widespread opposition to a proposed two-percentage-point VAT hike.

The latest proposal suggests a gradual VAT increase, raising it by one percentage point to 16% by the 2026/27 financial year. According to Godongwana, this would be implemented in two phases: a 0.5-point increase in 2025/26, followed by another 0.5-point increase the next year.

The proposal has been widely criticised, with opponents arguing that it would place an additional burden on struggling South Africans.

The size of the Cabinet has been widely criticised, particularly when compared to that of more developed nations. While Roodt acknowledges the political difficulties of reducing ministerial positions, especially given coalition politics and patronage, his call aligns with broader proposals for government reform.

Significant reductions 

For example, the DA envisions a Cabinet of just 15 ministries by 2029, while the Centre for Development and Enterprise (CDE) has also advocated for significant reductions.

The CDE suggests merging or eliminating several ministries, such as Public Works, Small Business Development, and Electricity, arguing that excessive bureaucracy has undermined governance.

“We are mindful of the political realities of a potential coalition government and the need for the President to accommodate various parties in his Cabinet. However, we believe that even within this constraint, it is possible to reduce the number of Cabinet Ministers and ensure the best people are selected for key portfolios,” said Ann Bernstein, executive director of CDE, in a statement in June 2024.

Meanwhile, the Outlier compared President Cyril Ramaphosa’s current Cabinet with those of countries like Germany, the UK, China, Brazil, and India, noting that South Africa’s Cabinet is more than double the size of Germany’s, which has only 17 portfolios.

Despite having a larger Cabinet, South Africa’s population (60 million) and economy (with a $405 billion GDP) are smaller than Germany’s, which has a population of 84 million and a GDP of $4 trillion.

However, the country’s Cabinet is smaller than those of China, Brazil, and India, which have significantly larger populations and economies.

At the same time, the African National Congress (ANC) has rejected the idea that cutting ministerial perks could resolve South Africa’s fiscal challenges.

The party argues that such cuts would not generate enough revenue to fund the country’s R2.7 trillion budget.

Instead, acccording to EWN, the ANC advocates for raising the value-added tax (VAT) by one percentage point over the next two years, viewing it as the most effective solution to finance essential government programs.

ANC Secretary-General Fikile Mbalula emphasised, during a media berifing in Johannesburg on Thursday, that although some cuts to ministerial perks have already been implemented, such as reducing the cost of vehicles, eliminating credit cards, and limiting flight class, a VAT hike remains the best option to sustain necessary government revenue.

“Ministers used to drive cars in the range of R1 million, it was cut to R500,000. Perks like credit cards were taken away. Ministers are flying economy, that was cut as well from flying business locally. You only fly business internationally,” the repot quoted Mbalula as saying.

Mbalula noted that while these adjustments help, they are insufficient to address the substantial budget deficit.

The ANC also expressed its willingness to collaborate with parties outside the Government of National Unity (GNU) to pass the proposed budget.

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