EC Provincial Treasury
Eastern Cape Finance and Economic Development MEC, Mlungisi Mvoko, says the province's fiscal outlook remains constrained.
Delivering the Medium Term Budget Policy Statement in the Bhisho Legislature on Tuesday, he said this was a result of several factors including the slow economic recovery, and public sector wage increases.
Mvoko said the high expenditure since the start of the Covid-19 pandemic has also contributed to this.
The MEC said the Eastern Cape's economy "economy is stagnant," with key sectors struggling to pull through while unemployment numbers were growing.
Mvoko said the province was also experiencing "government-wide budget deficits."
He noted that the province's unemployment rate was 47.4% in Quarter 3 of 2021 compared to 45.8 percent in quarter 3 of 2020.
"For non-metros, (the) joblessness rate is 51.6 percent, while our metros Buffalo City and Nelson Mandela are currently sitting at about 40%."
But, MEC Mvoko said that notwithstanding these devastating numbers, national and provincial economic growth rates were beginning to improve, recording 4.7 and 3.4 percent annualised in quarter 2 of 2021, respectively.
"For the full year National Treasury expects the national economy to grow by 5.1 percent in 2021, whilst the provincial economy is expected to follow on a similar recovery path at about 3.6 percent."
MEC Mvoko said the 2022 medium-term provincial fiscal framework reflects a total fiscal envelope of R251.938 billion, consisting of provincial equitable share, conditional grants, and provincial own receipts.
"In the 2021/22 Adjustment Budget, the total adjustment shows an additional amount of R3.793 billion allocated to the 2021/22 main budget, taking our provincial adjusted appropriation to R86.401 billion."
Mvoko said this increase is due to additional allocations of R1.991 billion to implement the 2021/22 Wage Agreement of the Public Service Co-ordinating Bargaining Council and R898.091 million for the Presidential Youth Employment initiative.
Commenting, DA MPL, Retief Odendaal, said the Adjustments Budget proves how years of financial mismanagement have affected the ability to provide better services to the people of the Eastern Cape.
"Instead of welcoming a budget that will open opportunities for our people in the Eastern Cape, we are left with little more than empty promises, as less and less money is made available for service delivery."
"The ballooning civil servant wage bill remains the elephant in the room, with nearly R2 billion, or roughly 53% of the total additional allocation in the adjustments budget, allocated to cover the cost of employment," Odendaal added.
