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Eastern Cape Finance MEC, Mlungisi Mvoko, tabled an adjustment budget of just over R84 billion rand in a virtual sitting of the Provincial Legislature on Thursday.
He announced that the provincial economy was projected to decline by minus 7% in 2020, with sectors such as travel and tourism, construction and tradable goods, expected to be negatively impacted.
Mvoko said however that it was “only the agricultural sector, which recorded growth of 6.21 % in quarter 2 of 2020,” and was expected to remain resilient.
In terms of jobs, he said the provincial economy generated lower aggregate employment numbers owing to the current COVID-19 pandemic, which has drastically limited the ability of people to search for work.
“Consequently, the unemployment rate in the province remains to be high at 45.8%, up from 36.9% in quarter 2 of 2020,” MEC Mvoko said.
He said in the 2020/21 Adjustment Budget, the Provincial Equitable Share has decreased to an adjusted budget of R69.1 billion from the main budget of R71.4 billion due to a reduction of R3.4 billion against compensation of employees.
Mvoko said the Provincial Treasury has however provided an amount of R2 billion from “reserves to cushion this cut, leaving us with a shortfall of R1.4 billion.”
Conditional grants have also decreased to an adjusted budget of R12 billion from the main budget of R12.4 billion.
“The total provincial adjustment shows a reduction of R909.6 million, which decreases the provincial adjusted appropriation from R85.4 billion to R84 billion.”
“Everyone’s focus must now be to support and align to the Economic Reconstruction and Recovery Plan that has been laid by President Cyril Ramaphosa,” Mvoko said.
Commenting on the budget, DA MPL, Retief Odendaal, said the “Eastern Cape Provincial Government was dealt a R3.476 billion blow, which was cut from the province’s equitable share for compensation of employees from the national government.
He said it was also shameful, in the extreme, that grant funding to the Eastern Cape is being cut, to be used as part of the R10.5 billion bailout of the ANC’s bankrupt vanity project, South African Airways.
“Even more so on the back of the recent announcement by Minister Pravin Gordhan that this will most likely not be enough to get it off the ground,” Odendaal said.
This is money that was meant to assist in building schools and hospitals, tertiary institutions, community libraries, and homes for our people.
