Economic growth in NC declines

2018-11-28 06:00
Mac Jack, MEC for Finance, Economic Development and Tourism, tabling the 2018-’19 provincial medium-term budget policy statement.Photo: Boipelo Mere

Mac Jack, MEC for Finance, Economic Development and Tourism, tabling the 2018-’19 provincial medium-term budget policy statement.Photo: Boipelo Mere

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The Northern Cape economy in 2016 grew at a very slow rate of 0,3%, slower than the 0,8% growth in 2015.

Mining and quarrying, and general government services, made the largest contribution to the provincial gross domestic product (GDP) as the unemployment rate for the third quarter of 2018 was at 27%.

According to Statistics South Africa, the Northern Cape is slightly behind the national unemployment rate of 27,5%.

The provincial unemployment rate declined by 1,9 percentage points from the previous quarter and it declined by 2,9 percentage points from the third quarter of 2017.

Community and social services is identified as the industry that employes the most people in the province.

Weaker economic growth, as well as high unemployment, is feared to have a negative impact on the fiscus due to potentially lower tax income and can lead to a higher demand for basic services.

Mac Jack, MEC for Finance, Economic Development and Tourism, thus highlighted the importance for provincial departments to re-prioritise and manage expenditure.

Jack tabled the 2018-’19 provincial medium-term budget policy statement at the Frances Baard District Municipal chambers on Wednesday (21/11).

He pointed out that the challenge government faced, was to re-look the budget and re-prioritise without it impacting on service delivery.

The average growth of the provincial budget over the 2019 medium-term expenditure framework (MTEF) is 5,6%, whilst the equitable share grows with an average of 7,4% over the same period.

Conditional grants show a negative growth of 6,1% in the base year of the 2019 MTEF. This is attributed to the once-off performance incentive received on infrastructure spending.

Own receipts grows with an average of 5,7% over the 2019 MTEF.

Despite the reductions as a result of the provincial equitable share review, the province has received an additional amount of R155,1 million over the medium-term expenditure, while the department of Social Development is allocated an amount of R13,7 million over the MTEF.

The provincial treasury has been allocated amounts of R15 million over the MTEF for the increase of technical capacity of infrastructure units, as well as R29,9 million to strengthen the support interventions at municipalities.

The Department of Education has been allocated an amount of R8,8 million in the 2019-’20 financial year for the provision of sanitary products for schoolgirls from Gr. 4 upwards.

The Department of Health has been allocated an amount of R26,4 million in the 2021-’22 financial year to provide for the absorption of doctors returning from Cuba.

Provincial own receipts will amount to R1,2 billion over the next three years, which represents an average growth of 5,7%.

In terms of the 2018-’19 adjustment budget allocations, the original budget tabled in March this year amounting to R17,1 billion is set to be adjusted with an amount of R434,4 million.

Of this total adjustment, an amount of R171,3 million or 39% represent a roll-over of both conditional grants and equitable share.

Jack clarified that this was not new money but merely a reallocation of unspent funds.

“In this regard, R89 million is made available, some of which is from the overcollection of own revenue,” he announced.

The departments have declared savings amounting to R82,2 million, of which R76,5 million has been re- prioritised from these savings to fund in-year pressure. An amount of R5,3 million represents self-financing sourced through retained funds by the provincial legislature.

The Department of Education has been allocated an additional R20 million to cover the shortfall in respect of improvements on conditions of service.

An additional amount of R10 million has been provided to the Department of Health to deal with the relocation and transfer of patients from West End Hospital to the New Mental Health Hospital. An amount of R5 million was made available to operationalise various new clinics.

The Department of Social Development has been allocated an additional amount of R12,5 million, of which R3,3 million is meant for the renovation and upgrading of the Lerato Place of Safety, R5 million relates to social relief of distress, whereas R4,2 million relates to the roll-over of substance abuse treatment grant.

The Department of Sport, Arts and Culture has been allocated an additional amount of R41,4 million, of which R29,3 million relates to conditional grant roll-overs and R1,8 million is approved equitable share roll-overs.

Furthermore, R5 million is allocated towards the repairs and maintenance of the A.R. Abass Sports Complex and the Mayibuye Cultural Centre, while R2,5 million relates to cultural and creative arts projects.

The Department of Agriculture, Land Reform and Rural Development has been allocated a total amount of R139,5 million of which R19,5 million relates to roll-overs to complete projects emanating from the previous financial year.

An amount of R85 million is earmarked to assist commercial and emerging farmers with animal feed due to the persistent drought which assists 2 379 farmers based mainly in the Namakwa and Pixley ka Seme District.

Included in the total amount, R35 million is allocated to the land care conditional grant to focus on the various aspects, including soil care and water conservation related to the drought situation in the Pixley Ka Seme, John Taolo Gaetsewe and Frances Baard District municipality and will cover 12 128 hectares.

The Department of Roads and Public Works was allocated an amount of R46,4 million, of which R20 million is earmarked to augment the Expanded Public Works Programme (EPWP). An amount of R20 million is also provided for the consolidation and surveying of immovable assets and R6,4 million relates to the ongoing upgrades of the Hotazel-Tsineng Road project.

Department of Cooperative Governance, Human Settlements and Traditional Affairs has been allocated an amount of R32,4 million in respect of a conditional grant roll-overs. An additional amount of R16,9 million is made available, of which R3,9 million relates to traditional leaders, R8 million to the water reticulation project in the Siyathemba Municipality and R5 million to the provision of decent sanitation in the Ubuntu Municipality.

The Department of Economic Development and Tourism has been allocated an additional amount of R22,5 million, of which an amount of R13 million relates to approved equitable share roll-overs, while R5 million is earmarked for the Youth Development Conference and R4,5 million is set aside for the urgent maintenance of the Mittah Seperepere Convention Centre.

The Department of Environment and Nature Conservation has been allocated an amount of R8 million to address a number of unforeseen pressures including asbestos radiation shortfall and other mandates emanating from national policy priorities.

The Office of the Premier has been allocated an additional amount of R6,9 million, of which R4,9 million is in respect of approved equitable share roll-overs from the 2017-’18 financial year and R2 million in respect of service delivery intervention programmes and oversight work.

The provincial legislature is allo­cated an amount of R20,3 million, of which R15 million is earmarked for constituency. A further amount of R5,3 million is also made available from the retained funds of the legislature to address various pressures. The provincial treasury’s baseline has been reduced by an amount of R27,9 million.

The Department of Transport, Safety and Liaison has been allocated an additional amount of R29,8 million. An amount of R5,6 million relates to roll-overs in respect of the 2017-’18 financial year, of which R961 000 relates to conditional grants and equitable share amounts to R4,7 million.

An additional amount of R24,2 million is made available, of which R10 million relates to the Boegoebay/Port Nolloth port commitments, R3 million is allocated for Special Economic Zones (SEZ) initiatives and R11,2 million relates to outstanding payments for learner transport from the 2017-’18 financial year.

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