President Cyril Ramaphosa smiles as new Agriculture Minister and Opposition Leader John Steenhausen shakes hands with Deputy President Paul Mashatile during the swearing-in ceremony of South African cabinet ministers in the Parliament in Cape Town on July 3, 2024. (Photo by Roger Bosch/AFP via Getty Images)
According to modelling by ENSafrica's tax executive Charles de Wet, President Cyril Ramaphosa's new appointees of ministers and deputies (75 in total) and their assistant staff will cost about R670 million a year, excluding perks.
According to Treasury's 2024 budget review and support staff, the R670 million does not include the annual salary of the president, R4.2 million, and the deputy president, R3.6 million.
According to the official gazetted pay scale for government employees for 2022-23, ministers will earn R2.6 million a year and deputy ministers will earn R2.2 million.
President Ramaphosa announced a unity government on Sunday after a month of negotiations after the ANC lost its majority in the May 29 general election. To align with the wishes of other parties, the number of ministers has been increased to 32 from 28, and the number of deputy ministers to 43 from 33 in 2019.
“During the course of the Sixth Democratic Administration, we indicated our intention to reduce the number of posts in the national executive. However, the need to ensure that the national executive is inclusive of all political parties in a unity government made this impossible,” President Ramaphosa said.
When he was newly elected president in 2019, he reduced the number of ministers in his cabinet from 36 to 28.
Explaining his modelling, De Wet said: “In my calculations, I looked at the total number of ministers and the annual salaries of deputy ministers. I also included their support staff, which came to R670,023,192. I did not include perks such as airfare and car allowances, because it is difficult to come up with that figure on an annual basis.”
He said South Africa was already burdened with a heavy tax burden: “There aren't many opportunities for economic growth at the moment. There is no other way to fund the new ministers in Cabinet. They have to come from tax revenue.”
But tax revenues are falling.
Reviewing the 2024 budget, Finance Minister Enock Godongwana said: “The downturn in our economy has led to a sharp deterioration in tax collections in 2023-24. Tax collections for 2023-24 are R1.73 trillion, which is R56.1 billion lower than the estimate in the 2023 budget.”
“The shortfall is primarily due to lower corporate profits and mining tax revenues.”
Action SA leader Herman Mashaba said the combined cost of benefits and perks for Ramaphosa's new cabinet and deputy cabinet will be more than R1 billion a year, of which more than R180 million will be allocated to the salaries of ministers and deputy ministers alone.
But economist Sifiso Skenjana said: “The R1 billion mentioned by Mashaba is probably a conservative figure because some of the costs are direct and some are indirect. If you add them all up it will definitely be more than R1 billion.”
He said the costs of a bloated cabinet include administrative costs, but also less direct ones, such as hindering policy making.
“Administrative costs are related to bringing people together in the same place at the same time, accommodating them for meetings etc. The more ministers you have, the more expensive all of this inevitably becomes,” Skenjana said.
The perks include transportation, VIP security and support staff as well as free water and electricity, according to the latest Ministerial Handbook, a document that serves as a guide to the benefits, tools of the trade and allowances that ministers and their families are entitled to in the performance of their duties.
The Democratic Alliance's (DA) new Public Works and Infrastructure Minister Dean MacPherson said this week that his first act as minister would be to tell ministers and MPs that the state would not be providing any new official residences, offices or furniture.
“That's my privilege,” he said.
According to the Ministerial Handbook, Mr Macpherson is the Minister responsible for the general interpretation and administration of the Handbook, overseen by the President.
Last year, President Ramaphosa approved a 3% salary increase for all civil servants.
The decision follows the recommendation by the Independent Civil Service Remuneration Commission for a 3.8% annual salary increase for all civil servants, including ministers, judges, magistrates and traditional leaders.
However, Minister Godongwana said the commission would increase revenue beyond what it can afford if budgetary constraints meant the increase was not possible. He criticised the government, saying it was only financially able to provide a 1.5% increase.
Sukenjana said further dividing the budget to suit ministries would be an added challenge with state resources already limited.
But there will be other costs to taxpayers that aren't just financial, he added.
“The trade-off is that challenges may arise in both policy design and policy implementation. This heterogeneity may slow down and hinder the policy-making process, which means that many of the reforms needed for our economy may move forward very slowly,” Skenjana said.
One example is the National Health Insurance (NHI).
The DA was vocal in its opposition to the NHI Bill before it was passed, calling the bill a “populist” ploy by the ANC to rally voters ahead of the May elections.
What is needed is “something the ANC has failed to deliver over the past three decades: a comprehensive overhaul of the entire health system, which spends a significant portion of GDP on health. The NHI is nothing more than a desperate attempt to fool the public into believing that it can fix the broken system that the ANC has perpetuated,” the report said.
Another challenge, Skenjana said, was the implementation of austerity measures.
Godongwana has continued the austerity policies implemented by his predecessors to reduce debt and achieve fiscal consolidation.
“The Treasury was on the path of cutting spending but in this bloated cabinet, the execution is the exact opposite. This will result in friction when ministers collate the budget. What will be the path towards austerity?” asked Skenjana.
Anne Bernstein, executive director of the Development Enterprise Center, said there is no such thing as the “wisdom of crowds” and that if a cabinet has any hope of acting cohesively and taking collective responsibility for decisions and their implementation, it needs to be small, agile and focused.
“A large cabinet filled with diverse views can be a place where any serious proposals for reform will slowly die out if left unchecked. [internally eroded] Through endless consultation and procrastination,” Bernstein said.
In a paper published in 2022 titled “Cabinet Size and Governance in Sub-Saharan Africa,” author Joachim Wehner said bloated cabinets are typically associated with corruption and practices that undermine sound policymaking.
The paper states that cabinet size is usually negatively correlated and one key implication is that a large increase in cabinet size should alert policymakers, donors, investors and the public to the potential implications for governance.
“In Kenya, for example, the president has used cabinet appointments as a tool for nepotism, resulting in a cabinet with more than 30 ministers and an equal number of deputy ministers,” Wehner writes.