Limpopo’s finances ‘back on track’

2012-03-06 12:10

The Limpopo government, which was so cash-strapped three months ago that it struggled to pay its staff, is on sound financial footing, the National Treasury has said.

In January, five departments were placed under administration after revelations that the province had run out of cash, could not pay suppliers and was short of not being able to pay civil servants.

At the time, it was reported that it had wiped out its overdraft of R757 million and had asked the Treasury to increase it to R1.77 billion. Moreover, the province was more than a billion rand in the red.

However, during the province’s budget speech today at the legislature in Lebowakgomo, about 50km outside of Polokwane, the administration team reported that the province now has a positive cash balance of R1.4 billion.

Treasury deputy director-general Kenneth Brown said Limpopo could even make a surplus of about R3.4 billion in the next three financial years, of which R1.7 billion will be realised in the 2012/13 fiscal year.

Addressing members of the media following the budget speech, Brown said: “The cash position of the province has improved.

“From January 6, the province has not used its overdraft facility and it has managed to live within its means. Remember, the main purpose of the intervention (placing some departments under administration) was to stabilise the finances.”

The R1.7 billion surplus, he said, can only be realised if all departments spend what has been allocated to them by Finance MEC David Masondo.

Masondo announced a R46.9 billion budget for the 2012/13 financial year.

The R3.4 billion, said Brown, will address accruals and unauthorised expenditure that has accumulated over the year.

The MEC said the budget will lay the foundation for the province to return its finances to a more sustainable path.

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