Jun 22, 2024
Economy

SA government seeks measures to fast-track spending by towns

SA Treasury

According to Treasury data, municipalities have  spent R35.4 billion in the three months to March, more than half of the funds allocated for capital expenditure, compared to R20. 3 billion (29.5%) in the previous quarter.

South Africa is examining measures to accelerate spending in cities  struggling to provide basic services like water and electricity.  Finance Minister Enoch Godongwana said in an online speech on Thursday that the government could allow municipalities to allocate infrastructure spending to use all allocated funds for three years in the first 12 months.

Cities and towns spend less on things like roads, water, sewer and electricity, and governments have disrupted the provision of services in areas  already struggling to provide necessities, leading to violent protests and sporadic attacks on foreigners. South Africa suffered its worst turmoil since the fall of apartheid in July, partly due to a lack of services.

While much of the rioting “was driven by criminal elements, it found fertile ground in the desperate economic situation faced by many of our people,” Godongwana said. “One way to overcome these challenges to delivering basic services, and to unlock the potential for high growth activities, is for municipalities to improve and maintain their infrastructure.”

According to Treasury data, municipalities have  spent R35.4 billion in the three months to March, more than half of the funds allocated for capital expenditure, compared to R20. 3 billion (29.5%) in the previous quarter.

Authorities in South Africa’s nine provinces should focus on health, education, roads and agriculture while municipalities must prioritise investing in bulk infrastructure to provide electricity, water and refuse removal, Godongwana said.

He also said that earlier this year, the Treasury announced a diagnostic review to develop the state’s ability to support local governance. The Ministry of Finance will provide  details on the government’s plans to support booming activities through infrastructure investments in an October medium-term fiscal policy statement.