Drop in capital expenditure

For the first time in more than a decade, public institutions are spending less, according to the latest capital expenditure figures released by Statistics South Africa this week.

Capital expenditure is money spent on acquiring, maintaining or improving assets such as land, buildings, vehicles and equipment.

Public expenditure decreased by 4.3% because of a reduction in spending on fixed assets by 360 of the 751 public-sector institutions in the previous year. Total capital expenditure fell by R12-billion from R283.3-billion in 2016 to R271.2-billion in 2017.

The biggest contributor to the decline was Transnet, which spent R25.4-billion in 2017 on fixed assets, a R8.2-billion fall from R33.6-billion in 2016. But it still remained one of the two biggest spenders, accounting for 9% of the public capital expenditure bill.

Top place went to Eskom, which accounted for 28% of the total bill and saw an increase in its capital expenditure, “mainly on the power generation projects at Kusile and on new electricity distribution programmes nationwide,” StatsSA said. Eskom spent R75.7-billion in 2017 compared with R73-billion in 2016.

A breakdown of the R271.2-billion in capital expenditure shows that, of the top three spending areas, just under 70% of it was on new construction, machinery and equipment.

Tebogo Tshwane is an Adamela Trust business journalist at the Mail & Guardian

Tebogo Tshwane
Tebogo Tshwane

Tebogo Tshwane is an Adamela Trust financial journalism trainee at the Mail & Guardian. She was previously a general news intern at Eyewitness News and a current affairs show presenter at the Voice of Wits FM. Tshwane is passionate about socioeconomic issues and understanding how macroeconomic activities affect ordinary people. She holds a journalism honours degree from Wits University. 

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