Duma Pewa
2 minute read
6 Jun 2009
00:00

Some financial advice for Zuma

Duma Pewa

THERE seems to be no end in sight to the turbulence that has hit hard the world’s economies, and those that have been hardest hit are those at the bottom of the food chain.

THERE seems to be no end in sight to the turbulence that has hit hard the world’s economies, and those that have been hardest hit are those at the bottom of the food chain.

For the super-rich mega millionaires and billionaires, it is business as usual. When the effects of the global economic meltdown started being felt by individuals and companies alike, the well-off thought the credit crunch was a new breakfast cereal.

When a dealer of exotic and super cars was interviewed in Johannesburg about six months ago, he said that out of 96 sales made, only four were financed and the rest were made on a cash basis, showing how immune some people are to the global crisis.

This was at a time when Joe Sample grappled with record-breaking food and petrol prices, and it does not look like the end is nigh, not yet anyway. Price-fixing also contributed to the high level of daylight robberies.

Mega economies around the world, such as that of the United States, where all the trouble always starts, and most of the European Union member countries, among others, have taken a beating. With this being the case, one can only wonder about a lot of the countries in South America, the Balkans and Africa.

Although South Africa has been spared most of the battering, thanks to sound fiscal policies, the effects of this global economic nightmare have become apparent as jobs continue being shed and companies strengthen their grip on their purses.

President Jacob Zuma’s walk, or rather crawl, to the highest seat in the land was eventful and there seems to be no end to this. If he thinks he can rest on his laurels, he had better think again, as this is the start to his challenges, albeit in a different form.

A lot of people from the different sections of society have been giving Zuma advice on how he can offset the effects of the economic meltdown on the government’s purse. Although I do not have an outright solution to this, I do know where he can start.

The two biggest parasites that have been eating away at taxpayers’ money are corruption and underexpenditure.

From politically-connected companies getting tenders, to tender funds being used for kickbacks, corruption results in poor quality being delivered, financial mismanagement and wasteful expenditure. It is shocking that there is no sanction for wasteful expenditure, for both the officials and the politicians.

Local, provincial and national governments continue to underspend on their budgets and funds are returned to the national treasury, while communities that should be benefitting from service delivery continue living in indigent conditions.

These two measures alone would go a long way to ensuring the efficient use of resources and would give the effect of budget allocations having been increased, instead of just having been used prudently. Other measures, such as reprioritising and reallocating, could be implemented as a lubricant to the government machinery.