The mid-term budget for the Northern Cape has been tabled and Mac Jack, MEC for Finance, Economic Development and Tourism, said the province has lost an amount of R166 million over the 2019 medium-term expenditure framework.
“Although the province has lost money in the 2019 budget framework, I must also indicate that a lot of work still needs to be done as part of this review.
“It is looking into specific peculiarities of provinces like the remote nature of our province and the type of data to be used in the components of the formula,” Jack said.
“Last year, I announced that there was a process underway at national level to review the Provicial Equitable Share (PES) formula.
“I would like to inform you that the province has lost an amount of R166 million over the 2019 Medium-Term Expenditure Framework (MTEF) as a result of this review of which R22,9 million is in 2019-’20, R56,9 million in 2020-’21 and R86,7 million in 2021-’22.”
According to Statistics South Africa (SSA), the Northern Cape’s economy grew in 2016 at a very slow rate of 0,3 %, which was even slower than the 0,8 % growth in 2015.
Mining and quarrying and general government services made the largest contributions to the provincial gross domestic product (GDP).
According to SSA, the Northern Cape’s unemployment rate for the third quarter of 2018 was at 27 %, slightly lower than the national unemployment rate of 27,5 %.
The provincial unemployment rate declined by 1,9 % points from the previous quarter and it declined by 2,9 % points from the third quarter of 2017.
The industry that employed the most people in the province was community and social services.
“Weaker economic growth as well as high unemployment can impact negatively on the fiscus due to potentially lower tax income and can lead to a higher demand for basic services.
“It is going to be difficult going forward as government would have to re-look at the budget and reprioritise without impacting on service delivery.
“It is thus important for provincial departments to reprioritise and tighten expenditure,” Jack said.
Furthermore, Jack said additional resources have also been allocated over the MTEF for interventions at various municipalities, as well as the capacitation of infrastructure units to ensure that proper monitoring of the implementation of infrastructure projects takes place.
“Although the province has lost money in the 2019 budget framework, I must also indicate to the members that a lot of work still needs to be done as part of this review.”
Despite the reductions as a result of the Provincial Equitable Share review, the province has received an additional amount of R155,1 million over the MTEF in order to address the following national priorities:
“These proposals were made under very difficult circumstances, which required us to be very cautious and to move only within what is available and not to negatively impact on our objective to clear the province’s cumulative unathourised expenditure,” Jack said.
“About R85 million is earmarked to assist commercial and emerging farmers with animal feed due to the persistent drought which assists 2 379 farmers based mainly in the Namakwa and Pixley ka Seme Districts.”
Included in the total amount, R35 million is allocated to the land care conditional grant to focus on the various aspects, including soil care and water conservation related to the drought situation in the Pixley ka Seme, John Taolo Gaetsewe and Frances Baard District Municipality and will cover 12 128 hectares, he said.
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