Brief review of 2014 Medium Term Budget Policy Statement from an HIV and AIDS perspective

By Joshua Karume  Plaxcedes Chiwire,  Nhlanhla Ndlovu  Dr Gesine Meyer-Rath  |  | 


The period following the first democratic elections of 1994 introduced significant changes in the public budget process in South Africa. The Constitution of the Republic of South Africa, endorsed in 1996, calls for specific laws and regulations regarding the implementation of measures to improve fiscal transparency and participation and commits government departments to the progressive realization of various socio-economic rights within the constraints of available resources. The Medium Term Budget Policy Statement (MTBPS) is among various government budget policy documents that provide a roadmap to preserve public finances and sets out the overarching policy goals that will guide government budget decisions and priorities over a three-year expenditure period, the Medium Term Expenditure Framework (MTEF) (National Treasury, MTBPS 2014).As the world economic recovery remains in a slow pace, the MTBPS indicated a downwards revision of economic growth from an expected growth rate of 2.7% to 1.4% in 2014/15. The government has committed itself to containing its spending within its previous targets but concedes that revenue has not recovered as initially expected and in fact will remain subdued over the medium-term (2014/15-2016/17). Nevertheless, the government suggests a fiscal package that will reduce the expenditure ceiling by 25% and raise tax revenue over the next two years. This is intended to reduce the budget deficit and stabilize the debt which is now set to reach R2.4 trillion in 2017/18 (Financial and Fiscal Commission (FFC), 2014).

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