Gauteng MEC for Finance and Economic Development, Lebogang Maile, has sounded the alarm on the province’s precarious financial situation, warning of a potential collapse by 2025.
This stark admission contradicts Premier Panyaza Lesufi’s assurances of Gauteng’s financial health while the provincial government is gearing up to pay a whopping R20 billion to the SA National Roads Agency (SANRAL) to settle the e-toll debt.
Maile was speaking at a media briefing this week outlining the province’s cash position after the provincial audit outcomes saying the province could be bankrupt by June next year if they were not careful.
This massive payment will be made in instalments, with the first R3 billion payment due on Monday. However, Maile conceded it was a financial strain.
His warning comes amid concerns over the ANC-led government’s prioritisation of vanity projects, such as the Nasi iSpani programme and crime warden training, which have yielded minimal returns.
Lesufi’s initiatives, including bursary schemes, a state-owned bank, and a pharmaceutical company, have further strained provincial resources.
“On Monday, we’re supposed to pay our first instalment towards the e-tolls. Remember, the citizens have refused to pay, now the government has to pay. So we are going to spend about R20 billion, R12 billion on the actual debt, R4 billion on the interest, another R4 billion on the maintenance,” Maile said.
He added that the challenges in health, and education, and the fact that about R15 billion of the provincial government budget had been cut was tolling heavily on the provincial purse.
“We have a lot of pressure, but we're working hard and doing a lot more to raise more resources so that we're able to keep up with the challenges and the pressures that arise from time to time,” he said.
The e-tolling system, which was officially scrapped earlier this year, has been a contentious issue since its launch in December 2013. Motorists were required to pay to use certain highways in Gauteng, mainly in Johannesburg and Tshwane.
The Gauteng government had initially agreed to refund R6.9 billion to those who paid e-tolls but later backtracked on this promise.
Maile further revealed that the Gauteng Health Department was sitting at a bill of R18 billion in litigation fees alone.
“We are sitting with more than R18 billion in litigation in the Department of Health alone… So, we will be meeting with the MEC (Nomantu Nkomo-Ralehoko) next week because health poses a huge threat in our budget,” he said.
Responding to Maile’s assertions about the dire financial situation in the province the DA said it had long cautioned against the province’s unsustainable spending patterns, with deficits of R5.4bn, R4.3bn, and R4.bn in consecutive financial years, attributing the financial woes to mismanagement.
The DA Gauteng shadow minister of finance, Ruhan Robinson, in a statement yesterday intimated that as the province was teetering on the edge of financial collapse, immediate action is crucial to prevent devastating consequences for service delivery.
“The Premier’s denial or dishonesty aside… It is shocking to hear MEC Maile speak as if this is a new problem. Despite this glaring problem, the ANC-led provincial government has been adamant about forging ahead with the status quo and introducing more vanity projects rather than working on much-needed reforms.
“While the substantial e-toll debt servicing cost has put a lot of pressure on the provincial government to make ends meet, it is merely compounding an existing problem and not the sole cause of the province’s financial woes.
“The DA will continue to monitor the situation and push for belt-tightening measures to protect Gauteng residents from government mismanagement,” said Robinson.
Attempts to get a comment from Lesufi’s office were unsuccessful at the time of publication.
The Star
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