The Limpopo government is facing dire financial constraints in the medium-term expenditure framework with several state departments and entities having almost exhausted their annual budgets.
Some government leaders are already in panic mode as service delivery has come to a halt in many areas, this as local government elections are fast approaching. The situation is exacerbated by the loss of billions of rand through the VBS scandal.
The government held an exco budget lekgotla in Polokwane on Wednesday, where Premier Stan Mathabatha described the situation as “a slippery slope to peril”.
Although he attributed the current dire financial constraints mainly to slow economic growth, Mathabatha mentioned corruption, fraud and other illegal activities within the government as contributing factors.
“It is clear from these objectives of the PFMA [Public Finance Management Act) that there is no room for wasteful expenditure, fraud and related financial irregularities when dealing with public resources.
“We know that there will not be any additional income for us from the fiscus. The current path is a slippery slope to peril,” Mathabatha said.
So far, the education department, which was allocated R32.3 billion in the current financial year, is likely to downsize some programmes such as school nutrition programmes, infrastructure development at schools and the hiring of teachers.
The health department also indicated its R20.8 billion budget was almost exhausted.
‘We are operating like loan sharks’
Speaking to News24, Health MEC Phophi Ramathuba said: “Already, red buttons are flickering in a number of areas. If there are no interventions made, we might not reach March 31 [next year] with the money that we have.
“It means we must negotiate with service providers to say they must continue to supply medicines, oxygen, etc., and we’ll pay after April [next year]. This means that we have already started spending the budget of the next financial year.
“We are operating like those who go to the mashonisa [loan sharks] to sustain themselves. We have to address the baseline funding, otherwise we are not going to win on this.”
Finance MEC Seaparo Sekoati said: “There are of course some critical areas where we will need to allocate some more resources to ensure the sustainability of some projects.”
He added the outcome of the budget lekgotla and the way forward would be outlined during the provincial medium-term budget speech next week.
The National Education, Health and Allied Workers’ Union (Nehawu), one of the biggest trade unions in the province, raised concerns that funds continued to be lost through corruption.
Its provincial secretary, Jacob Adams, said: “In this difficult economic situation, we can’t afford to have wasteful and irregular expenditures. Money must be channelled toward service delivery.”