The Northern Cape will have a balanced budget for the first time in almost a decade. This is the result of departments coming under the whip to stop perennial overspending, which caused an accumulated R844-million debt, according to this year’s Budget documentation.
Following stringent cost-cutting and ongoing monitoring of fiscal discipline across departments, economic affairs provincial minister Pakes Dikgetsi recently told the provincial legislature: “[We] are more than likely to break even for the 2004/05 financial year”.
The 2005 Budget will balance even as R80-million of the R5,1-billion is allocated to debt repayment. In two years, the province expects to have cleared the R844-million deficit, accumulated over almost 10 years of unauthorised social spending.
While there had always been reserves to cover the debt, the province has increasingly come under pressure from National Treasury to get its finances in order. As recently as 2003, overspending stood at 0,25%.
Norman Shushu, head of Dikgetsi’s office, said a committee established to scrutinise departmental expenditure was key in stopping overspending.
The Northern Cape only generates 2% of its own revenue, largely through receipts from capital assets.
Improving economic growth is key: 43% of residents earn less than the R800 that represents the breadline.
Last year, provincial projects under the Expanded Public Works programme created 9 030 new jobs in a province with an unemployment rate of about 30%. Yet the Northern Cape has the highest number of health-care workers per 100 000 residents and in the past five years has repeatedly had the highest matric pass rate in the country.