In this era of ever-changing economic challenges, KwaZulu-Natal is working to reduce its budget deficit by implementing drastic cost-cutting measures. With a projected deficit of R9 billion by the end of the current financial year, the province’s Government of Provincial Unit (GPU) has announced measures that could result in an estimated R3 billion in savings.
Driven by the Treasury Instruction issued by Finance Minister Francois Rodgers, the initiative is aimed at addressing budgetary pressures while continuing to deliver essential services. According to a statement from KZN Treasury, these measures were approved at a recent provincial cabinet meeting and include significant reductions in subsistence and travel expenses, international travel, vehicle hire, functions and catering.
Rodgers stressed that the cuts were necessary to offset the financial constraints that have led to the mounting accumulation of government debts and late payments to suppliers. He also affirmed the GPU’s commitment to achieving a budget surplus by the end of its term, stressing the need for strict fiscal discipline and new sources of revenue.
He made it clear that essential expenditures would not be compromised, stressing the government’s commitment to job creation, poverty reduction and frontline service delivery, particularly in the education and health sectors.
This cost containment strategy is in line with the recent Medium Term Budget Policy Statement (MTBP) Report by National Finance Minister Enoch Godongwana, which confirmed that the national economy remains sluggish, with pressure on the debt-to-GDP ratio. The PBTM also confirmed that no additional mid-term funding would be allocated to provinces, reinforcing the need for fiscal reforms at the provincial level, Rodgers stressed.
However, the province expects to receive a boost from the new census data, with a potential R4 billion increase in its fair grant under the Medium Term Expenditure Framework.
Despite this potential relief, Rodgers warned that non-compliance with the new fiscal policies would not be tolerated, invoking provisions in the Public Finance Management Act to ensure compliance. The move is part of a broader commitment to building an ethical and competent provincial government, while seeking to balance fiscal responsibility with critical service delivery priorities in a challenging economic environment..
In an uncertain economic climate, the province of KwaZulu-Natal is seeking to implement critical financial reform to ensure a strong economic base and efficient delivery of essential public services to its citizens.