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After contracting by 1,8% in 2009 in response to the global recession, South Africa's domestic economy was expected to grow by 2,3% in 2010, increasing by 3,6% by 2012.

The recession had a far-reaching impact on South Africa, with almost a million jobs lost between the fourth quarter of 2008 and the first quarter of 2010.

Economic activity has started to revive and a gradual improvement in household consumption, employment and private investment is expected.

The improved outlook is supported by expansionary fiscal and monetary policies, public-sector investment, lower inflation, higher commodity prices and the upturn in global demand.

National Treasury aims to promote economic development, good governance, social progress and rising living standards through accountable, economic, efficient, equitable and sustainable management of South Africa's public finances.

National Treasury endeavours to advance economic growth, broad-based empowerment, progressive realisation of human rights and the elimination of poverty. It is responsible for preparing a sound and sustainable national budget and an equitable division of resources among the three spheres of government. It strives to raise fiscal resources equitably and efficiently and to manage government's financial assets and liabilities soundly, promoting transparency and effective financial management.

The Constitution stipulates a framework for the division of responsibilities between national, provincial and local government. It prescribes an equitable division of revenue between the spheres of government, taking into account their respective functions. It has also created an independent Auditor- General (AG) and an independent central bank, and sets out the principles governing financial accountability to Parliament, as well as the annual budget process.

Relevant sections in the Constitution include:

• General financial matters
  • National Revenue Fund
  • Equitable shares and allocations of revenue
  • National, provincial and municipal budgets
  • Treasury control
  • Procurement
  • Government guarantees
  • Remuneration of persons holding public office
• Financial and Fiscal Commission
  • Establishment and functions
  • Appointments and tenure of members
  • Reports
• Central bank
  • Establishment
  • Primary object
  • Powers and functions
• Provincial and local financial matters
  • Provincial Revenue Funds
  • National sources of provincial and local government funding
  • Provincial taxes
  • Municipal fiscal powers and functions
  • Provincial and municipal loans

Source: South Africa Yearbook 2010/11
Editor: D Burger. Government Communication and Information System

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Last modified: 20 July 2011 14:32:46.