With the state of the nation address (Sona) behind us, all eyes will turn to the budget speech due on February 21. Usually, the president mentions a few items for the minister of finance to flesh out, but this year one had to scratch quite deep to detect anything relevant to the budget in Cyril Ramaphosa’s address to the opening of parliament.

Ramaphosa made an oddly big deal of a planned investment in 14,000km of power transmission lines. The number isn’t new — it comes from Eskom’s Transmission Development Plan that has been around since October 2022. Electricity minister Kgosientsho Ramokgopa has spoken about it on several occasions since. Yet this plan, which is intended to apply to the next decade, hasn’t been turned into reality. And it is an ambitious number requiring 1,500km of lines being built every year, whereas Eskom has been averaging about 300km.

What was new in the Sona was the statement that “to fast-track this process, we will enable private investment in transmission infrastructure through a variety of innovative investment models”. That is a pretty obscure statement, but I think it heralds something interesting to come in the budget speech.

The National Treasury could do two things to add meat to the idea. The first is to finalise amendments to regulations concerning public-private partnerships (PPPs), the formal structures that allow for government entities and private sector entities to develop new projects jointly. PPPs are subject to onerous oversight and regulation, often making it much easier for public sector entities to simply spend on budget.

Reforms have been in the offing for some time. We’ve been promised in several previous budget speeches that they will be delivered soon. One reform that has been suggested is to make it easier to create template PPPs. For instance, grid projects all have common elements, so create a blanket approval for a standard grid PPP format and limit the additional bureaucracy to only specific variations from the template.

Second, the Treasury could firm up its control of infrastructure planning overall. There has been a strange evolution of thinking around infrastructure since the Ramaphosa administration began in 2018, with a strong attempt to move its planning away from Treasury, first into the presidency and then into the department of public works and infrastructure (but still, in the detail, under closer co-operation with the presidency). That resulted in a plethora of new institutions and unclear mandates, while public investment in infrastructure simply continued to shrink.

Treasury has quietly leaned against this institutional inflation, pointing out that constitutionally it must hold the purse strings. I think there has been a wider recognition that this means Treasury must be much more involved in the planning too. With the shifting of Ramokgopa’s focus from infrastructure in the presidency to electricity, gravity is shifting back to Treasury. The budget could solidify this, using grid investment as a key plank.

Of course, the key thing the budget must do is set the tone for overall fiscal management. And that means how it balances spending and revenue. The Sona was interesting in giving little by way of populist spending promises. Ramaphosa did promise an extension of the social relief of distress grant, introduced during Covid, which has since then been near impossible to remove. An extension is already priced in, but the president didn’t make any commitments to its permanence.

The other populist front is the National Health Insurance bill, with the president again committing to sign the bill, which is on his desk, soon. The NHI is a pantomime – it is totally unfundable and will never happen. The speech struck some more cautious notes than before about NHI, saying it will be implemented “incrementally” with various dysfunctions in the system dealt with sequentially.

That is well and good, but the legislation sitting on his desk isn’t incremental. It is all in, immediately establishing a new fund, though it provides for the minister to declare it fully implemented for all the provisions to take effect, particularly the guillotine to the private health insurance system. But if government wants it to be sequential and gradual it could make that much more explicit in the legislation.

As it is, should the president sign it into law as he has promised, it is going to immediately face a wall of litigation on its constitutionality. I expect the Treasury will continue to treat NHI as if it is told by an idiot, full of sound and fury, signifying nothing. It will continue to just about ignore it for budgeting purposes apart from some money for feasibility studies.

As this is an election year, the pressures on the budget are huge. The Treasury has earned back market credibility over the past few years as it stuck to its guns in constraining, if not quite turning, the debt trajectory we were on by the end of the Zuma years. It must stick to this path, while being buffeted by populist demands and strained revenue. The good news from the Sona is that the president, at least, hasn’t forced it off track.

• Stuart Theobald is chair of research-led consultancy Krutham (formerly Intellidex).
  This article first appeared in Business Day.