How did government spend R2.04 trillion in one financial year?

The South African national government has increased its spending from R1.17 trillion in financial year 2014/2015, to R2.04 trillion in financial year 2022/2023.

Statistics South Africa’s (StatsSA) latest set of national government financial data shows the national government spent trillions of rands through grants, interest paid on debt, social benefits, compensation of employees, and goods and services. The R2,04 trillion excludes capital expenditure and represents expense cash flows recorded by all 42 national government departments.

Allocation of funds

The bulk money of the national government spending, which is 55%, was spent on grants paid to other levels of government, institutions, and foreign governments. Whereas 15% was spent on interest paid on debt. While 12% went to social benefits, 9% to compensation of employees, 4% to goods and services, and the remaining 4% went to “other”.

In financial year 2014/2015, the allocation of funds was different. Out of the R1.17 trillion that the national government spent that year, 60% went to grants, 10% was spent on interest paid on debt, 11% spent on social benefits, another 11% on compensation of employees, 6% on goods and services, and 4% on other.

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Grants allocation

StatsSA reveal that 55% spent on grants accounted for R1.12 trillion in the financial 2022/2023. The bulk of the money went to provincial governments, amounting to R694 billion. Provincial government departments are responsible for various functions at a provincial level, most of the allocation of funds at the provincial level goes to health and education.

Out of the R1.12 trillion spent on grants, R180 billion was received by public institutions responsible for delivering services to the public on behalf of government, these are institutions such as the Road Accident Fund; the South African Revenue Services, and the Unemployment Insurance Fund.

R151 billion was allocated to local government, which consists of municipalities. Higher education institutions and foreign governments received less than R50 billion each, while international institutions received R4 billion.

Interest paid on debt doubles

The interest paid on debt doubled when compared to the 10% paid in 2014/2015, which amounted to R114.8 billion, to the 15% paid in 2022/2023, which amounted to R308.5 billion. “This represents an average growth rate of 13,2% per year, outstripping the rise in total expenses (up 7,2% per year),” notes StatsSA.

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Social grants and benefits

R242.04 billion was spent on social benefits, which represented the third largest category in 2022/2023 which money was spent on. The bulk of the allocation, 96.7% went to the country’s social grant programme, which goes to funding household grants for child support, old-age, sickness and disability, as well as others. The remaining 3.3% was for employment-related social benefits. Since 2014/15, the social benefit allocation has grown by an average of 8,8% per year.