Enquiries: Ismail Momoniat Tel: 012-315 5165 Cell: 083 378 0333 e-mail: ismail.momoniat@treasury.gov.
The second quarter figures indicate that provincial year on year spending increased sharply between 2002/03 and 2003/04, confirming that spending capacity of provinces is improving. Provinces spent R77,9 billion, or 47,2 per cent of their total annual budget of R165,2 billion, which represents an increase of R10,2 billion over the same period in 2002/03.
Provinces are performing well on their capital spending compared to last year. Capital spending is recorded at R6,3 billion or 35,1 per cent of the capital budget of R17,9 billion, an increase of R1,1 billion or 21,2 per cent over the same period in 2002/03. The bulk of the remaining R11,6 billion on capital may also be committed on projects. This analysis is based on the sta tement of revenue and expenditure published by the National Treasury on 30 October 2003, and is available on the treasury website www.treasury.gov.za.
National government transferred R71,2 billion of the equitable share grant, and R7,7 billion in conditional grants, to provinces to date for the 2003/04 financial year.
Social development expenditure increased sharply by R4,5 billion from R15,5 billion in 2002/03 to R20 billion in 2003/04 which could mainly be attributed to the extension of the Child Support Grant and higher growth in the Disability Grant.
Health expenditure of R16,9 billion is R1,3 billion higher compared to the same period in 2002/03 financial year.
Strong growth in education capital spending. Present expenditure of R1 billion is R394 million higher than the same period last year.
Provincial own revenue is R2,9 billion or 56,9 per cent of the R5,1 billion own revenue annual budget, perhaps indicating that the budgeted amount is somewhat conservative.
This report on the implementation of the 2003/04 provincial budgets after six months of the financial year, is based on their budgets as published in 2003/04 Provincial Budget Statements.
Table 1 indicates actual expenditure against budget and the actual expenditure as a percentage of the budget.
Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape 25 442 461 2 490 074 27 932 535 10 293 114 762 452 11 055 566 22 007 693 5 021 963 27 029 656 28 953 741 3 954 548 32 908 289 19 599 444 1 773 406 21 372 850 10 311 332 1 050 425 11 361 757 3 518 900 371 903 3 890 803 12 181 036 1 021 668 13 202 704 14 986 913 1 426 899 16 413 812 11 935 975 1 541 261 13 477 236 5 064 950 197 542 5 262 492 11 248 617 1 391 082 12 639 698 14 405 044 1 203 842 15 608 886 9 154 907 680 096 9 835 004 5 028 391 442 233 5 470 624 1 791 546 122 280 1 913 826 5 926 407 245 671 6 172 078 7 114 023 453 052 7 567 075 48.2% 47.6% 46.8% 47.4% 46.0% 48.1% 49.2% 46.7% 46.
Total 147 294 634 17 873 338 165 167 972 71 669 859 6 277 060 77 946 919 47.
ï¿½ Provinces spent R77,9 billion, or 47,2 per cent of their total budget of R165,2 billion. This is R10,2 billion more than the expenditure at the same time last year.
ï¿½ Personnel expenditure of R39 billion (48,1 per cent of the personnel budget) also represents 50 per cent of total provincial spending. This component of expenditure is likely to rise fa ster in the second half of the financial year due to salary adjustments, which took effect in July 2003.
ï¿½ Provinces have budgeted R133,3 billion for social services, which include spending on education, health and social development1. Spending on social services is at R64,8 billion or 48,6 per cent of the budget.
ï¿½ School Education : Education expenditure is recorded at R27,9 billion or 47,5 per cent of the budget of R58,8 billion and is R2,5 billion higher compared to the same period of the 2002/03 financial year. With education budget being largely personnel driven, expenditure on personnel is R24,1 billion or 48,9 per cent of the R49,3 billion personnel budget.
ï¿½ Health: Health expenditure to date is at R16,9 billion or 46 per cent of the budget of R36,7 billion. Health spending is R1,3 billion (8,2 per cent) higher compared to the first half of the 2002/03 financial year.
ï¿½ Social Development: Provinces spent R20 billion or 53 per cent of the budget of R37,8 billion representing an increase of R4,5 billion over the same period in 2002/03. This is mainly the result of acceleration in the take-up of the Child Support and Disability Grants as well as payments of Social Grant Arrears. The trend suggests that provincial social development budgets will come under pressure, and may have to be adjusted upwards in the coming months.
Education Health Social Development 58 796 667 27 914 254 36 713 734 16 889 564 37 797 946 20 036 194 47.5% 46.0% 53.
Total 133 308 347 64 840 012 48.
ï¿½ Capital expenditure to date is R6,3 billion or 35,1 per cent of the capital budget. This is a significant improvement, as provinces have spent R1,1 billion more, an increase of 21,2 per cent compared to the same period last year.
ï¿½ Typically, capital expenditure will most likely be spent in the last two months of the financial year.
ï¿½ The province with the highest proportion of capital spending is the Eastern Cape, which spent almost 62 per cent of its capital budget. It should be noted that the Housing budget is incorrectly classified as current expenditure and will be adjusted in their provincial 2003 Adjustments Estimate.
ï¿½ The lowest level of capital spending is by North West (24 per cent), Free State (25,9 per cent) and Gauteng (27,7 per cent). In absolute terms, the highest capital expenditure is in Eastern Cape at R1,5 billion, Gauteng at R1,4 billion, followed by KwaZulu-Natal at R1,2 billion.
ï¿½ Capital spending has increased sharply in all provinces except in Free State, North West and the Western Cape compared to the same period in 2002/03.
Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape 2 490 074 1 541 261 762 452 197 542 5 021 963 1 391 082 3 954 548 1 203 842 1 773 406 680 096 1 050 425 442 233 371 903 122 280 1 021 668 245 671 1 426 899 453 052 61.9% 25.9% 27.7% 30.4% 38.3% 42.1% 32.9% 24.0% 31.
Total 17 873 338 6 277 060 35.
The biggest provincial capital budgets are for Public Works, Roads and Transport. These departments are performing the best, having spent R1,9 billion or 39,7 per cent of the R4,7 billion 2003/04 annual budget. The spending compares well with the spending of R1,8 billion during the same period in 2002/03. Between provinces, the lowest spending is the Northern Cape with only 28,8 per cent of their budget spent, whilst the highest is recorded by the North West at 60,2 per cent.
Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape 884 177 444 043 192 958 87 482 706 946 238 253 1 096 323 362 475 528 743 189 413 273 706 127 208 97 483 28 031 204 256 122 941 726 578 269 336 50.2% 45.3% 33.7% 33.1% 35.8% 46.5% 28.8% 60.2% 37.
Total 4 711 170 1 869 182 39.
Education departments have spent 33,4 per cent or R1 billion of their capital budget. This level of spending exceeds the half-year spending of R630 million (62,6 per cent) in 2002/03. Spending in KwaZulu -Natal (15,1 per cent) and Northern Cape (26 per cent) are relatively low, whilst Free State (50,4 per cent) and Mpumalanga (46,2 per cent) have seen a good improvement in spending. In absolute terms, Gauteng has a substantial increase in spending (R228,2 million) as compared to the same period in 2002/03.
Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape 437 107 193 425 120 359 60 691 777 273 323 253 1 015 626 153 608 302 133 118 847 206 006 95 073 26 036 6 778 145 002 58 552 37 471 13 864 44.3% 50.4% 41.6% 15.1% 39.3% 46.2% 26.0% 40.4% 37.
Total 3 067 013 1 024 091 33.
Health departments have spent 29,7 per cent or R835 million of their capital budget. This level of spending is similar to the level experienced during 2002/03. Between provinces, the lowest share of spending is in Gauteng (8,2 per cent), Northern Cape (13,3 per cent), North West (15,6 per cent) and Western Cape (18,3 per cent). The highest spending is recorded by Eastern Cape with R239,8 million or 47,9 per cent, a significant increase compared to the same period in 2002/03.
Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape 500 399 239 819 43 749 12 231 624 109 50 872 815 748 314 560 285 227 123 082 170 724 36 181 79 523 10 557 187 311 29 149 99 646 18 241 47.9% 28.0% 8.2% 38.6% 43.2% 21.2% 13.3% 15.6% 18.
Total 2 806 436 834 692 29.
Table 7 shows capital expenditure in Housing at R1,3 billion or 34,1 per cent of the capital budget of R3,9 billion. The level of spending has slowed down relatively and has also fallen slightly by R134 million compared to the same period last year.
Out of an average of 8 provinces, excluding Eastern Cape where the budget is classified incorrectly, provinces spent R 1 billion or 27,1 per cent of the budget. The incorrectly classified budget for Eastern Cape will be adjusted in their 2003 Adjustments Estimate. Given the audited underspending of R821,6 million last year, it appears that a similar trend will be repeated this year.
Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape 17 605 281 556 355 978 15 219 1 048 510 261 940 804 405 325 164 452 397 140 055 313 412 159 351 137 858 70 048 377 620 2 268 438 182 91 613 -4.3% 25.0% 40.4% 31.0% 50.8% 50.8% 0.6% 20.
Total 3 945 967 1 347 215 34.
ï¿½ Provincial own revenue is recorded at R2,9 billion or 56,9 per cent of the 2003/04 budget compared to R2,4 billion for the same period last year.
ï¿½ National government transferred R71,2 billion of the equitable share grant, and R7,7 billion in conditional grants, to provinces to date.
ï¿½ In total, including provincial own revenue, provincial revenue at the end of the second quarter is R81,8 billion or 18,8 per cent higher than in 2002/03.