2017’s science budget goes up, but the money buys less

Analysis

On paper, South Africa’s science and technology budget continues to edge up. On Wednesday, finance minister Pravin Gordhan delivered his national budget to Parliament, sharing out the country’s R1.56-trillion.

The department of science and technology’s budget’s looks set to continue to increase: From R7,44-billion in 2015-16, and R7,43-billion in 2016-17,  it will be hitting R7,56-billion in 2017-18. Going further, the projected spend for 2018-19 is R7.92-billion and for 2019-20 R8.19-billion. This is far from the 1.5% of gross domestic product spent on research and development that the government is targeting (and has been targeting for a number of years now). But in an environment of high poverty and multiple demands on the state fiscus, any increase at all is — quite frankly — a miracle.

But when looked at in the context of previous budget reviews, the latest figures paint a different picture:

 

What this shows is a budget that, while increasing or remaining stable, has actually been revised down. These figures are taken from the 2015, 2016 and 2017 budget reviews.

Additional bad news for the science community is that this money does not buy what it used to: Consumer Price Inflation is expected to range between 4.6% and 6.4% for this period. To keep up with inflation, the department would need at least an additional R300-million (R480-million if inflation is high) each year just to keep up. According to the budget numbers, money for science and technology is not increasing in real terms.

Another major obstacle for research funding in South Africa is our weak currency: these new numbers do not take currency volatility into consideration. Luckily the currency has strengthened slightly (this time last year, the currency was in the middle of a beautifully executed dive off the high-diving board and research institutions were feeling the pain of it). But the reality is that local researchers struggle to compete internationally when journals are priced in pounds, dollars and Euros, as is most scientific equipment.

Maybe this will be the year when business, recognising that government can no longer push the R&D agenda, will return more whole-heartedly to the research table. South Africa’s R&D spend is quite singular in that government is the largest spender on research and development, having overtaken business a few years ago. In most countries, business drives R&D and innovation. Gordhan mentioned in his speech that the department of science and technology’s R&D tax incentive (which gives companies tax breaks for doing R&D in South Africa) brought in R30-billion between 2006 and 2016. Relatively speaking, that is not a lot of money. But allegedly the number of businesses involved in the incentive scheme is increasing.

While these numbers in context show that spending on science and technology is actually declining, the bright side is that the science budget did not get cut. And with gross domestic product growth of 0.5% last year (which is expected to rise to 1.3% this year and to 2% in 2018), that really is a bright side: science, technology and research — often considered “nice to have’s” — are usually where cash-strapped governments look to cut the fat.

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