2021/22 Provincial adjustment budget speech presented by MEC for Finance, Motlalepula Rosho at the North West Provincial Legislature on 30 November 2021
Mmusakgotla Mme. Sussana Dantjie
Motlatsa Mmusakgotla
Mme. Viola Motsumi Motlotlegi Tonakgolo
Kaobitsa Bushy Maape
Bakhuduthamaga ba batlotlegang
Maloko a Kokoanotheo-molao a tlotlegang
Baeng ba rona batlotlego
Bagaetsho, Dumelang.
Honourable Speaker, I am pleased to stand before this august house to table this adjustment Budget just a few weeks after SouthAfricans exercised their democratic right to elect Local Government representatives. Although we recorded the lowest voter turnout since the advent of democracy, we need to appreciate that these recent elections affirmed the sturdiness of our democracy. We can debate all day and throughout the night about the reasons for lower voter turnout however, one thing we will all settle on, is that our people are getting tired of poor service delivery and unfulfilled promises. Notwithstanding this, our people have given us a chance to self-correct and firmly commit to rise to the occasion and not squander this opportunity.
As we commence with the next five year term of local government, our public representatives should draw inspiration from the selflessness of Mama Charlotte Maxeke by committing to turn around the appalling situation within our municipalities. Mama Maxeke who would have turned 150 years this year made significant contributions to our nation's freedom, democracy and development. We will always remember, honour and salute her.
Honourable Speaker, we will also continue to salute all women freedom fighters and other fore-bearers from all generations who were part of our liberation struggle as they made invaluable sacrifices and contributions that
led to our country's democratic dispensation.
We draw strength from the good deeds of our historic leaders as we continue to grapple with the impact of the dual pandemics of COVID-19 and Gender Based Violence and Femicides, which remain a major concern and disruption to our collective efforts. We are reminded that there is no true
leadership without community service, and no interest is greater than the common good. We remain steadfast in our determination to overcome both these pandemics together with any other challenge that comes our way.
Mmusakgotla, Setswana se a retlhako ya morago egata fa ya pele e gatileng teng. Re iponetse bagaka ba rona ba lwa ntwa kgatlhanong le tekatekano ya bong, kgethololo, lehuma le kgololosego go sena matlole mme kwa bofelong ka ntlha ya bogatlhamelamasisi le go rata nnete, ba ne bafenya. Bagaetsho, a gone re ka palelwa ke go fenya dikgwetlho tse di re lebaneng mo nakong ya gompieno re na le didiriswa le fa e se tsa sepe ka ntlha ya kgatelelo ya maemo a ikonomi? Nyaa, kana ga re magatlapa. Phenyo retla e bona fa fela re le ngata e le nngwe mme moono e le go direla setshaba sa rona.
Honourable Speaker, during his maiden speech after being sworn in at a sitting of this august house, the Premier of the North West Province, Hon. Bushy Maape indicated that the strategic direction of the province will be centered on quality service delivery and job creation. In response to the Premier's clarion call, the Adjustment Budget process has taken this vision into account. We are indeed in the midst of a crisis like no other and our focus should not shift from preserving lives and delivering quality services. COVID- 19 has shattered our social and economic order at breakneck speed and on a scale unseen in living memory.
Consistent with the Hon. Premier·s strategic direction, the adjustment budget makes provision for job creation and improved service delivery in the current financial year as follows: -
- R431.038 million as part of Presidential Youth Employment opportunities within the Departments of Health, Education and Social Development for health staff, assistant nurses for COVID-19, education assistants, general school assistants and social workers (based onthe unemployed social worker graduates),etc.
- R86.800 million towards Accelerated Service Delivery initiatives in relation of unlocking challenges relating to the provision of water, grading of gravel roads, pothole patching through the Department of Public Works and Roads and Cooperative Governance and Traditional Affairs.
This allocation is in addition to the R63.736 million allocated at the beginning of the current financial year towards the Expanded Public Work Programme (EPWP) job opportunities within Departments of Health, Arts, Culture, Sports
& Recreation, Community Safety & Transport Management, Education, Cooperative Governance & Traditional Affairs, Public Works & Roads, Social Development and Agriculture & Rural Development.
Honourable Speaker,we applaud the people of South Africa and the North West Province for responding to the vaccination campaign against COVID-19. This demonstrates our affection for our country, province and its people. We will continue to encourage those who have not been vaccinated to do so in order to set a good example for our youth and children. When we continue to vaccinate in large numbers, we will undoubtedly achieve population immunity, which is necessary for our economy to function normally.
Economic outlook
Honourable Speaker, the current economic climate remains difficult and the coronavirus (COVID-19) outbreak has already brought considerable human suffering and major economic disruption. Output contractions in large economies like US, China and Europe are being felt around the world, reflecting the key and rising role that these centers are playing in global supply chains, travel and commodity markets. Subsequent recurring outbreaks in other economies are having similar effects, albeit on a smaller scale.
The COVID-19 pandemic has brought South Africa to the brink of a serious social and economic crisis. The pandemic prompted the introduction of the Government Risk Adjusted Strategy in March 2020 which was geared towards controlling the spread. This coupled with the current energy crisis, has had a detrimental effect on the South African economy, which was already in recession before the pandemic. The economy has slowly been recovering due to the gradual relaxation of the lockdown measures. The National Treasury estimates are that the economy will bounce back to register a growth of 5.1 per cent in 2021 from a contraction of 6.4 per cent which we saw in 2020.
Honourable Speaker,according to IHS Markit, the economy of the North West Province registered its worst performance and contracted by 7.9 per cent in 2020 thus reflecting a deepening economic crisis in the province. IHS Markit projections are that the provincial economy is expected to recover with an anticipated growth of 6.3 per cent in 2021.The recovery will be aided by the current relaxation of lockdown measures and the opening upof economic activities.
The province needs to position itself to effectively participate in the ever evolving economy1 thus the need to embrace change and remain agile in riding the new wave of economic opportunities. The future of jobs lies in the economic competitive edge of the province within the global space. We remain cautiously optimistic that the economy will bounce back as we continue to rollout the vaccine with the hope of reaching the expected population immunity soon.
2021/22 Adjustment Budget Framework
Honourable Speaker, in tabling the 2021 Medium Term Budget Policy Statement on the 11th November 20211 the Minister of Finance Hon. Enoch
Godongwana outlined key policy issues guiding the allocation of resources in view of fiscal consolidation. Amongst others, the following key principles were outlined;
- Fiscal consolidation is critical to reduce the public debt burden, restore investor confidence and avoid overexposure to global and domestic risks;
- The Medium-Term Budget Policy Statement proposes to maintain restraint in public expenditure;
- No additional funding is provided to state owned companies over the medium term;
- Over the next three years, spending will remain restrained to avoid a widening of the budget deficit, changes to spending will be funded through improved revenue performance or through reprioritisation and reviewing existing programmes; and
- Infrastructure projects will be financed through the Infrastructure Fund, using public private partnerships and other funding arrangements to improve planning and speed up delivery.
In support of the above, the North West Provincial Government has also reprioritized and reallocated the budget of Departments, from underperforming programmes to address current budget pressures.
As a result, the projected under expenditure on infrastructure has been reallocated to avoid material under expenditure, possible March spike which is synonymous with fiscal dumping and irregular expenditure.
The Provincial Budget allocation increases from R46.240 billion to R48.788 billion, which translate to an increase of R2.548 billion. The increase is inclusive of the following: -
- R395.813 million for Conditional Grants rollovers and R96.618 million for Equitable Share rollovers;
- R431.038 million for the Presidential Youth Employment Initiative allocated to the Social Cluster Departments namely, Education allocated an increase of R401.2 million, Health receiving an increase of R24.6 million and Social Development increased by R5.2 million;
- R1.071 billion for Wage Agreements: Cash Gratuity; and R59.841 million for additions to the Conditional Grants (Health and Social Development to relieve pressures on CoE for ECD's and placement of Medical Interns.
Honourable Speaker, on aggregate, the Provincial Compensation of Employees (CoE) allocation increases by R1.403 billion due to amongst others the recent Wage Agreement Settlement for levels 1to 12. A sizeable portion of the funding is allocated to departments of Education and Health which receive R783.915 million and R480.5 million, respectively.
Owing to the current spending trends and possible underspending by other departments, CoE allocations have been reduced to cater for the shortfall in relation to the 1.5 per cent increase and Performance Management and Development System (PMDS) obligations that need to be met including the once-off examination CoE expenditure. The proposal makes provision for a flexible R30.5 million within CoE.
The Department of Health is allocated an additional R350 million to address budget pressures as a result of COVID-19 related items inclusive of the vaccination rollout. The said amount is allocated specifically for those items and should not be shifted to any other purpose.
Details of the 2021/22 Adjustment Budget
Social Cluster
Honourable Speaker,combined public expenditure on Social Cluster which consists of Education, Health,Social Development) Human Settlements and Arts, Culture, Sports and Recreation amounts to R38.982 billion or 80 per cent of total provincial budget. The allocations for the specific departments for thiscluster are as follows: -
The Department of Education's allocation is increased by R1.284 billion, from R18.011 billion to R19.295 billion. This increase is inclusive of the following:
- R401.242 million additional for Basic Education Employment Initiative; and
- An additional amount of R783.915 million is allocated to address budget pressure on Compensation of employees;
The department receives equitable share and conditional grants rollovers totaling R62.515 million and R36.529 million respectively. Included in the rollover amount of equitable share arethe following allocations:
- R36.281 million for Learning and Teaching Support Materials (LTSM).
- R5.042 million for School Furniture Public Ordinary Schools,
- R5.570 million for Grade 12Teachers' Laptops,
- R13.754 million for Presidential Youth Employment Initiative; and
- R1.868 million for Sanitary Dignity Projects.
Honourable Speaker, the COVID-19 pandemic remains with us and the Department of Health will continue to play a critical role in fighting this pandemic. The Health budget is increased from R14.119 billion to R15.271 billion, which translates to an increase of R1.152 billion. This increase consists of: -
- An amount of R24.576 million for Health StaffAssistant Nurses;
- R480.500 million to address CoE budget pressures;
- R350 million is allocated as additional for COVID-19 related expenditure;
- Conditional Grant rollover of R246.589 million for Health Facilities Revitalization Grant; and
- R13.039 million for National Tertiary Services Grant.
Honourable Speaker, additional allocations of R5.220 million and R28.414 million are made to the Department of Social Development's budget for the appointment of social workers as part of addressing the backlog of unemployed social worker graduates and to address CoE budget pressures, respectively. Furthermore, an amount of R22.165 million was reduced from infrastructure allocations, bringing the adjusted allocation for this department to R1.828 billion in the current financial year.
The Department of Human Settlements receives an additional amount of R47.735 million, which is made up of R42.677 million and R4.989 million as rollovers for Human Settlements Development Grant and Tittle Deeds Restoration Grant respectively and the adjustment of R731 thousand from own revenue. An additional, R800 thousand has been allocated to address budget pressures on CoE. As a result, the budget for this department is adjusted to R1.893 billion.
The Department of Arts, Culture, Sports and Recreation's budget is adjusted downwards by R14.883 million, from R710 million to R695 million. The adjustments consist of conditional grants rollover of R7.770 million for Community Library Services Grant and reductions of R10.326 million from Infrastructure and R21.887 million from CoE. Furthermore, rollovers from the equitable share consisting of R2.9 million for sportswear and equipment, R1.869 million for Mmabana white fleet replacement and R4.791 million for Refurbishment of Mmabana Buildings were received.
Economic Cluster
Honourable Speaker, the budget for the Department of Economic Development, Environment, Conservation and Tourism is adjusted downwards to R892.302 million. This adjustment is as a result of the reduction of infrastructure amounting to R51.853 million and an additional R6 million to assist the department with other pressures in the current financial year.
The budget allocation for the Department of Public Works and Roads has been increased by R17.610 million, resulting in the adjusted budget of R3.367 billion. The adjustments consist of:
- A rollover of R2.925 million for upgrading, rehabilitation and refurbishment of assets;
- R29.685 million to address budget pressures on CoE;
- An amount of R5 million is also added for the Kgabo to Kubu Roads at Pilanesburg Park; and
- An amount of R81.8 million has been reduced from both roads and public works infrastructure and redirected tothe following:
- R61.800 million is allocated for the grading of gravel roads and pothole patching; and,
- R20 million moved to COGTA to unlock the challenges relating to the provision of water inthe province
Honourable Speaker, amounts of R10.4 million, R1.642 million, R2.172 million and R1.225 million are added to the Department of Agriculture and Rural Development•s budget as rollovers for the Comprehensive Agricultural Support Programme Grant, lllima/Letsema Projects Grant, Land Care Programme Grant: Poverty Relief and Infrastructure Development and Agricultural Disaster Management Grant, respectively. The goods and services budget has been decreased with R5.5 million while the department also receives an increase of R34.840 million to address budget pressures on CoE, adjusting the departmental budget to R1.209 billion.
The budget for the Department of Community Safety and Transport Management is adjusted to R2.165 billion, consisting of a rollover of RB.275 million for PilanesburgAirport Renovations and reductions of R17 million for infrastructure and a further reduction of R24.233 million from CoE.
Governance Cluster
Honourable Speaker,the equitable share rollover of R5.1 million and RB.2 million were allocated to the Office of the Premier's budget for maintenance and migration of the mainframe. The budget was also reduced by R43.307 million mainly from CoE. The departmental budget is therefore adjusted to R451.570 million.
The budget of the Provincial Treasury is adjusted from R509.299 million to R517.514 million, translating into an increase of RB.215 million. This net increase consists of a budget reduction of R6 million, a R785 thousand reduction from CoE and an increase of R15 million for the packaging of mega projects.
The Department of Cooperative Governance and Traditional Affairs receives an additional amount of R10 million for the reconstitution of traditional councils, R18 million to address budget pressures including implementation of Section 138(b) of the Municipal Finance ManagementAct (MFMA) and R20 million to unlock the challenges relating to the provision of water.The departmental allocation is also reduced by R33.276 million from CoE. Resultantly,the total allocation is adjusted to R689.065 million.
Honourable Speaker, the budget for the Provincial Legislature has been adjusted upwards with R47 million based on their retained earnings, thus increasing the budget to R514.255 million for the current financial year.
Government is committed to continue to dedicate considerable resources to core functions and priorities that will address the triple challenges of poverty, inequality and unemployment. This requires government to contain costs, exercise prudent and compliant financial management, and eradicate wasteful use of public funds and resources.
Honourable Speaker, the slow spending on infrastructure is regrettable considering the undesired service delivery levels and the inadequate investment through infrastructure. Infrastructure planning and delivery remains a challenge for most departments despite the implementation of the Infrastructure Delivery Management System (IDMS) and the Framework for Infrastructure Delivery and Procurement Management (FIDPM) that guide infrastructure planning and implementation.
In consideration of the above the Provincial Treasury will intensify focused training and support programme to departments, to ensure that projects planned for implementation are ready at the beginning of the financial year. These will include among others the following programme:
- Rollout of the Infrastructure Delivery Management Body of Knowledge (IDMBOK) targeting specific focus training areas for each department based on their challenge;
- Consolidation of a list of blocked and incomplete projects which will be assessed with the view of prioritization and implementation based on their individual challenges during the 2022 MTEF;
- In collaboration with the National Treasury, we have invoked the use of the enhanced IRM to reduce the capturing errors and smooth out the reporting process which will make it easy for oversight and monitoring as well as the implementation of interventions;
We have also made an allocation that seeks to accelerate the support towards finalizing the planning and packaging of Mega and Catalytic Projects identified for PPP and Blended funding through national interventions. We are making a humble plea to departments to present such projects to ensure that the Province is on the right trajectory of economic recovery and development.
In conclusion
Honourable Speaker, I wish to take this time to congratulate all newly elected Municipal Representatives and call on them to exercise ethical leadership so that we can root out corruption from our municipalities as it is
the biggest stumbling block to good governance.
They must not abuse their offices to fulfil their personal interests at the expense of the people. This crop of representatives must demonstrate ethical leadership in their daily actions and decisions. By so doing they will be able to hold corrupt municipal officials to account for their actions.
Honourable Speaker, the South African Government has worked tirelessly to preserve our heritage and history so that we never forget where we come from as a nation, most importantly, we use the courage of our past heroes and heroines to caution and inspire the younger generations to work selflessly and dedicate their formative years to the betterment of this great country.
Mama Charlotte Maxeke is one of the many heroines who joined the struggle for freedom to improve the quality of the lives of our people rather than self enrichment. It is against this backdrop, that I quote these words by this giant with the hope to inspire and anchor our newly elected municipal representatives during their term of office. "This work is not for yourselves, kill that spirit of self and do not live above your people but live with them and if you can rise bring someone with you".
Honourable Speaker, I would like to emphasize that municipalities have elected leaders from whom they expect efficient, effective, sustainable, and cost-effective delivery of basic services, which is the core function of their existence as a municipality's council. Our immediate actions will determine the speed and strength of our recovery. We must stop holding the wheels of service delivery hostage.
I once again take this time to salute our frontline healthcare workers for their dedication and hard work throughout the past twenty months of battling the scourge of the coronavirus. We have seen how devastating the virus is and through it all they remained resolute. It is in them that our strength lies. We further thank them for the sterling job they have been doing to roll out the COVID-19 vaccination throughout the province.
As at 29 November 2021, a total of 1 530 132 vaccines have been administered. A lot more would have been achieved had it not been for the hesitancy caused by unverified theories and misinformation regarding the COVID-19 vaccines. Those who are still hesitant are encouraged to vaccinate to not only protect themselves but to also protect their loved ones against this virus. The future of the country is in our hands.
