KZN will fight hard to stay in the black, says premier

2012-02-22 00:00

THE KwaZulu-Natal government has come a long way in two-and-a-half years and appears to have bucked the trend of beleaguered provinces sliding into debt.


It has leapt from being R5,6 billion in the red to being R3,6 billion in the black, which is why Premier Zweli Mkhize crowed just a little during his state of the province address.

“The province is not ready for the smell of section 100 of the Constitution,” he said to laughter.

Section 100 is applied when the national government intervenes in the affairs of provincial governments, as happened recently in Limpopo and the Eastern Cape.

Mkhize said KZN had managed to repay its overdraft, clear unauthorised expenditure and received interest on positive cash balances.

“We ended the last financial year with substantial savings as a result of our fiscus austerity measures … If there are departments that are already projecting to overspend their current budgets they are warned to mend their ways and seek early Treasury support.

“We once went that route,” said the premier.

“We shall fight very hard never to get back there again.”

Treasury spokesperson Ntokozo Maphisa said the province had been in overdraft due to overspending in the 2007/08, 2008/09 and 2009/10 financial yars.

The provincial recovery plan, with a list of 21 cost-cutting measures, was introduced to nurse the province back to financial health.

“Midway through the 2009/10 financial year the picture was bleak.

“Projections indicated that the province was heading for an over-expenditure of some R5,6 billion if we did not take drastic action.

“The provincial cabinet then took a bold decision to implement the recovery plan, which all provincial departments and public entities were compelled to implement with effect from October 2009.”

By December 2009 the projected overexpenditure of R5,6 billion had declined to R2,55 billion.

Maphisa said that by March 31, 2010, provincial departments had overspent the KZN budget allocation by R1,902 billion.

By the 2010/2011 financial year, the province had been able to settle the provincial overdraft in 18 months instead of in the three years it had planned.

Maphisa said the cost-cutting measures would remain in place for the foreseeable future as they “are really elements of good governance rather than a once-off attempt to contain costs”.

“It is only prudent to keep this plan in place given the uncertainties of the global and domestic economic growth prospects.”


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