1 month ago
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This past week, Gauteng government departments presented their budget votes for the 2024/2025 financial year. While Gauteng is the nerve centre of the SA economy, contributing almost 35% to the GDP and 7% to the total GDP of Africa, it is confronted with challenges from internal and external factors.
The province’s budget was tabled in an environment characterised by deep fiscal constraints and a weak economic outlook, reflecting the effects of power cuts, poor performance of the logistics sector, high inflation, rising borrowing costs, and a weaker global environment. Additionally, the persistent legacy of the Covid-19 pandemic that decimated economies continues to be felt.
Gauteng had the worst economic contraction of all provinces in 2020 – the impact of which continues to be felt across industries. Particularly impacted is infrastructure maintenance and development. Due to Covid, several infrastructure projects ran over the prescribed time, with significant cost overruns. Other industries that have not fully recovered include construction, tourism, agriculture, retail and wholesale trade and domestic services.
These challenges illustrate the socioeconomic realities particular to Gauteng, which has unique characteristics, including particularly high levels of unemployment. Gauteng’s unemployment rate, at 33.7%, is higher than the national average of 32.9%, and four out 10 [40%] people entering the labour force in SA are in Gauteng.
In the context of the high unemployment levels, especially among the youth, the persistent deeper levels of poverty and rising crime levels, the provincial budget prioritises the sustained provision of critical services to the public, while improving the sustainability of public finances to ensure growth and development.
The budget is a reaffirmation of the government’s commitment to the vision articulated in the Growing Gauteng Together 2030 Plan, which is focused on economic recovery, investment, industrialisation, youth employment and the township economy.
The budget also elevated priorities anchored on townships, informal settlements and hostels, which are home to about 60% of Gauteng’s population. The focus on this demography is aimed at ensuring Gauteng’s economy is inclusive and redresses past injustices that still impede SA’s developmental agenda.
The budget is also aimed at sustaining the resourcing of key priority areas that include the acceleration of economic recovery and reconstruction; prioritising people’s health and wellness; and strengthening the state’s capacity to deliver efficiently.
Recognising the detrimental impact of the continuing damage and theft of public infrastructure, the budget is also dedicated to strengthening the battle against crime, corruption, vandalism and lawlessness in Gauteng.
For the current financial year, Gauteng received R155.9 billion in transfers from the national government. This is comprised of provincial equitable share and conditional grants. This is in addition to Gauteng’s revenue collection, which is expected to increase from R8bn in 2024/25 to R8.3bn in 2025/26 and R8.7bn in 2026/27.
The provincial government is hard at work ensuring the implementation of the revenue enhancement strategy as a means of generating revenue to fund projects aimed at growing the economy and job creation. Of specific focus are infrastructure projects. Gauteng departments of human settlements, education, roads and transport, health, and sport, arts, culture and recreation will receive the conditional grant funding for their infrastructure programmes.
A need to maintain the existing infrastructure assets to the original condition informs the allocation of R13.8bn while R22bn is availed to expand the capacity of existing infrastructure and provide new infrastructure assets.
These interventions seek to position Gauteng as a destination for investment and job opportunities, and to stabilise and grow its economy in a sustainable and inclusive manner.
- Maile is the Gauteng MEC for finance and economic development
