This was according to finance minister Pravin Gordhan, who presented the 2013 Medium Term Budget Policy framework for the next three years in parliament today.
According to Gordhan, the focus of the mid-term budget was very much the same as last year’s with emphasis on giving preference to the growth strategies set out in the National Development Plan aimed at helping increase employment, enabling economic growth and lowering income inequality.
To this end, said Gordhan, spending on infrastructure, health, education and social assistance would continue to grow.
Total budgetary allocation for national, provincial and local government was set to amount to R952 billion in 2013/2014, and this would increase to R1,164 trillion over the medium term.
GDP growth (currently at 2,1%) was expected to recover over the next three years, reaching 3,5% in 2016.
Inflation was projected at 5,9% in 2013 and should remain within the target band of 5% to 6% over the medium term.
Gordhan said several developments will support the transition to more rapid economic growth over the medium term.
“Construction of the Medupi and Kusile power stations is well underway. We will have additional electricity supply from Medupi towards the end of 2014.
“Over the next 12 years we will replace more than 300 trains for the 2 million people who use Metrorail every day.
“Greater emphasis will also be placed on improving collaboration between public- and private-sector agencies in agricultural development and support for emerging farmers.”
The medium-term budget policy statement listed government’s initiatives to relieve energy supply constraints. These included the publication of draft regulations for shale gas exploration in October 2013, with a view to processing exploration applications in 2014; progressive implementation of the renewable energy independent power producer programme, now in its third round of contract awards; the publication of blending regulations for biofuels, with pricing arrangements to be finalised by mid-2014; and a request for proposals to procure the next coal-fired power station and for co-generation of electricity to be issued by mid-2014.