The Gauteng MEC for Finance, Lebogang Maile, has warned that the provincial government is at risk of collapsing financially by 2025. While the MEC is finally admitting that there is a problem with how the fiscus of the province is currently being administered, immediate action must be taken to prevent this from happening. The potential collapse of Gauteng’s finances will severely impact the rendering of services in the province.
The comments by MEC Maile come in stark contrast to the sentiments of Premier Panyaza Lesufi, who perpetually reminds our residents of the healthy state of Gauteng’s finances. The Premier’s denial or dishonesty aside, the DA has been sounding the alarm on the province’s unsustainable spending patterns for years.
It is shocking to hear MEC Maile speak as if this this is a new problem. In the previous financial year, the province ran a deficit of R5.4 billion, and the projected deficit in the current financial year is set to be R4.3 billion. Similarly, in the following financial year, the province is expected to have a deficit of R4.1 billion. Despite this glaring problem, the ANC-led provincial government has been adamant about forging ahead with the status quo and introducing more vanity projects rather than working on much-needed reforms.
In the recent past, the province invested large amounts of money in the Nasi iSpani programme including the training of crime wardens, only for much of this money to be returned to the provincial treasury. Premier Lesufi has introduced bursary schemes, a state-owned bank, a state-owned pharmaceutical company, and several initiatives aimed at usurping the mandates of local government. This spend-first, plan-later approach to government puts unnecessary strain on provincial financial resources.
While the substantial e-Toll debt servicing cost has put a lot of pressure on the provincial government to make ends meet, it is merely compounding an existing problem and not the sole cause of the province’s financial woes.
A DA-led provincial government would have prioritised financial reform to stabilise its financial position and ensure sustainable service delivery to residents. The DA will continue to monitor the financial situation in the province and push for belt-tightening measures to ensure that Gauteng residents are not once again negatively affected by mismanagement in government.