overview
19 February 2009
MEC for Provincial Treasury, Sa'ad Cachalia presented the budget for the
Limpopo Provincial Government for the Medium Term Expenditure Framework. The
following are some of the key highlights of the speech.
Global economic overview
Consideration was given to the performance of the global economy and its
current and potential impact on South Africa and, particularly, Limpopo. This
meltdown has been slowly developing with the global economic growth rate going
down from 3,7 percent in 2007 to 2,5 percent in 2008.
This has affected the exchange rate negatively as it resulted in
depreciation and the prices of bonds and equities falling. It has also struck
at the heart of the financial system as it has led to a decline in the global
demand for South African export products. This obviously, continues to have an
impact on areas that influence people's livelihood including job creation.
During the speech MEC Sa'ad Cachalia indicated that, "what started off as a
subprime crisis amongst Wall Street bankers has degenerated into a swirling
tailspin putting world economies on the brink of ruin."
It is the interconnectedness of the global economy that makes it possible
for South Africa to feel the global shock. However, for South Africa this has
not been to as great an extent as it has been for other countries. The
reasonably low levels of public and foreign debt have resulted in a cushion
against the maximum impact of this global economic slowdown.
During the 2009 National Budget Speech, Minister Trevor Manuel concisely
captures this when he says, "In 1996 public debt was 48 percent of Gross
Domestic Products (GDP) and rising. Today, public debt is 23 percent of GDP.
Reducing the budget was the right thing to do, and the outcome is that burden
of debt service costs has declined and resources have been released to spend on
education, health care, housing and infrastructure. This also means that today
we are able to respond to the economic downturn, boldly and decisively."
Even under ordinary circumstances government always has resource
requirements that are larger than what the fiscus can accommodate.
Achievements
Through the Provincial Growth and Development Strategy (PGDS), there have
been collaborative efforts aimed at improving investment in public
infrastructure, enhancing the competitiveness of the provincial and local
economy, as well as the general improvement in the quality of lives led by
citizens.
As reflected from the Budget Speech, the following are some of the
achievements made during the 2008/09 financial year:
* The 2008/09 target on households that have access to potable water was
994,798 households or 80 percent of the population. By the end of 2008, 907 753
(84 percent cumulatively) had access to piped water
* By the end of 2008, 620 596 or 84,2 percent households in the province have
access to free basic water
* The Department of Water Affairs has completed the water purification works at
the Nandoni Dam with bulk line infrastructure at 70 percent complete. The De
Hoop Dam currently under construction is at 30 percent complete. Every clinic
in the province has access to water and the water quality is being upgraded
through reverse osmosis plants. The Independent Electoral Commission (IEC)
water for schools programme at voting stations is progressing well.
* By the end of 2008, 564 548 or 45,4 percent of households had access to
sanitation.
* At the end of 2008, 957 493 households or 81 percent had access to
electricity. While 215 280 households or 29,2 percent had access to free basic
electricity
* Statistics South Africa General Household Survey (2007) indicates that 4,4
percent is the overall percentage of households living in informal settlements
in Limpopo. This proportion is significantly lower than the national average
which is at 15,4 percent
* 78 percent of the clinics in the province operated on a 24 hour basis by the
end of 2008. This is an increase from 2007
* Limpopo's HIV and AIDS prevalence rate has reduced from 21,5 percent in 2005
to 20,7 percent in 2006 and 18,5 percent in 2007 respectively.
Budget
Due to challenges that have arisen over the past financial year, it has
become necessary to make some tough choices on what programmes needed funding
in the 2009/10 MTEF.
A number of factors have contributed to these revisions. These are the
effects of the global meltdown (economic crisis), the revision of the
provincial equitable share allocation and the public sector wage agreement.
The province, therefore, had to reduce the budget by amounts of R372,1
million, R568,9 million and R870,1 million over the 2009/10, 2010/11 and
2011/12 financial years respectively.
Therefore, the overall provincial budget will stand at R34,5 billion, R38,2
billion and R41,3 billion over the 2009/10, 2010/11 and 2011/12 financial years
respectively.
Social sector cluster will gather R26,2 billion or 76 percent of the budget.
The economic sector cluster will get R5.9 billion or 17 percent. The governance
and administration cluster will get 2,4 billion or 7 percent of the budget.
Vote 1: Office of the Premier
Amount: R559 million
Vote 2: Provincial Legislature
Amount: R123,869 million
Vote 3: Education
Amount: R16 billion
Vote 4: Agriculture
Amount: R1,2 billion
Vote 5: Treasury
Amount: R329 million
Vote 6: Economic Development
Amount: R744 million
Vote 7: Health
Amount: R9 billion
Vote 8: Roads and Transport
Amount: R2,9 billion
Vote 9: Public Works
Amount: R724 million
Vote 10: Safety, Security and Liaison
Amount: R47 million
Vote 11: Local Government and Housing
Amount: R1,4 billion
Vote 12 : Social Development
Amount: R761 million
Vote 13: Sport, Arts and Culture
Amount: R231 million
Conditional grants
The following conditional will continue to receive priority:
* national school nutrition programme
* Comprehensive Agricultural Support Program (CASP)
* national tertiary service
* integrated housing and human settlement development
* public transport operations grant
* Expanded Public Works Programme (EPWP)
* hospital revitalisation grant
* comprehensive HIV and Aids grant
* library services
* integrated housing and human settlement development.
Devolution of property rate fund
During 2008 adjustments budget a number of new conditional grants were
introduced in the 2008 MTEF that continue as part of the 2009 budget, namely
Ilima/Letsema Projects grant and Agricultural Disaster Management grant under
the Agriculture Vote, Overload Control grant under the Transport Vote:
* the Ilima/Letsema projects
* the agricultural disaster management
* the overload control
* health disaster response (cholera)
* public transport operations grant
* Expanded Public Works Programme (EPWP).
2009/10
Equitable share: R29,8 billion
Conditional grants: R4,1 billion
Own revenue: R599,6 million
Total: R34,5 billion
2010/11
Equitable share: R32,5 billion
Conditional grants: R5,1 billion
Own revenue: R596,6 million
Total: R38,2 billion
2011/12
Equitable share: R34,8 billion
Conditional grants: R5,9 billion
Own revenue: R617,9 million
Total: R41,3 billion
Issued by: Office of the Premier, Limpopo Provincial Government
19 February 2009
Source: Office of the Premier, Limpopo Provincial Government (http://www.limpopo.gov.za)
