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Budget Speech 2017

South Africa's growth and transformation

Provincial financial management


In the context of our constrained fiscal environment, provinces have already made progress in reducing spending on non-core goods and services and in controlling personnel costs. Spending on non-essential goods and services fell in real terms by 7.1 per cent in 2014/15, 6.1 per cent in 2015/16 and is anticipated to decline by 4.5 per cent annually over the medium term. The proportion of provincial spending on personnel has declined to just under 60 per cent in 2016/17, freeing up more resources to invest in services.


Provinces have also put their public entities under review, to eliminate duplication of activities and ensure effective governance and clear development mandates.


Three new conditional grants will take effect in 2017/18. They will expand access to early childhood development and improve facilities, provide for increased employment of social workers and improve opportunities for learners with profound disabilities.


The Auditor-General has called for stronger leadership within provinces to remedy financial management challenges. Better cash management is needed to ensure suppliers are paid on time. Improved oversight is needed to curb unauthorised expenditure. There must be adherence to procurement rules to limit irregular expenditure.