/ 29 January 2012

Having an overdraft doesn’t mean you’re broke — Mathale

Limpopo premier Cassel Mathale believes his cash strapped province will have surplus on its R40 billion budget by the end of the current financial year.

Speaking to journalists after opening his party’s two-day lekgotla in Polokwane on Sunday, Mathale said the province was not bankrupt and was still able to pay civil servants and service providers from its allocation.

This was despite Finance Minister Pravin Gordhan’s pronouncement earlier this month that the province was facing a potential R2-billion deficit, due to the violation of the Public Finance Management Act and gross violation of procurement policies.

‘We have not exhausted our budget the issue of us being technically bankrupt is as a consequence of the overdraft that has been there,” said Mathale.

“When you have an overdraft, it does not mean that you are bankrupt, you just have overdraft which is an arrangement with your bankers.”

‘We are not bankrupt, we still have our allocation ….there are possibilities that we may not spend all our money.”

Limpopo’s head of treasury Nerulal Ramdharie recently requested an increase of the provincial government overdraft from R757 million to R1.7 billion, which was rejected by Gordhan.

This had saved millions of tax payer’s money, Mathale said.

The province’s finance, education, health and social development, public works, and education departments were placed under the national government’s control last year. The remaining departments were operating under guidelines provided by national government.

Limpopo’s financial woes were due to unauthorised expenditure, which grew from R1.5 billion in 2009 to R2.7 billion in 2011, Gordhan said earlier this month. A forensic investigation into the shortfall was currently underway.

In his opening address at the lekgotla earlier on Sunday, Mathale appealed to ANC members in the provincial government not to be “defocused” by the fact that five departments had been placed under national administration.

“This must not defocus from the commitment we have made to the people on the mandate they have given us to deliver to their needs,” he said.

He said the province had an obligation to turn the current state of affairs around, “no matter how much we may not like this reality or view it as unwarranted”.

Mathale called on party members to work hard to ensure the Limpopo government got back control of the five departments, and do so quickly.

It was the “responsibility of the caucus to transform constituency offices into one-stop centres that offer assistance to our people”.

Officials who neglected their constituency work and obligations were “betraying the movement and our people.”

Mathale called for the “overdue” reconfiguration of parastatals so they could play a more active role within job creation and economic diversification. However, jobs could not be created without input from the private sector.

Mathale told the meeting that the Eurozone debt crisis had hampered the province’s job creation plan, with growth sustained, but at a slower rate.

The two-day long lekgotla ends on Monday. — Sapa