Not so long ago, South Africa’s annual budget speech was postponed to March due to a lack of agreement on budget spending, with the government hinting at increasing VAT to fill its coffers.
One can’t help but wonder: if the billions lost to fruitless, wasteful, and irregular expenditure were better managed, would we even be talking about tax hikes and such dire measures?
The figures presented by the Auditor-General of South Africa (AGSA) for the 2023/2024 financial year are staggering: R4.9 billion in unauthorised expenditure, R2.9 billion in irregular expenditure, and R161 million in fruitless and wasteful expenditure have been recorded by national government departments alone.
This is just the beginning, as 36 government departments accounted for R1.48 billion in fruitless and wasteful expenditure, while 27 SOEs were responsible for a further R2.08 billion. In total, irregular expenditure from government departments and SOEs amounts to a staggering R120 billion.
These figures don’t just speak to poor financial management; they indicate a breakdown in the very systems meant to ensure accountability in the public sector.
The enormous sums of public money misused over the past year not only reflect a failure of governance but also threaten to undermine the services that South Africans desperately need.
How can the government justify tax hikes when so much money is being wasted?
This systemic financial mismanagement is a dangerous precedent that continues to erode public trust in the government.
The consequences of such financial irresponsibility are felt most acutely by ordinary citizens. Public funds are meant to fuel essential services like education, healthcare, and infrastructure development. Instead, billions are lost through inefficiency, corruption, and lack of oversight, leaving the public short-changed.
It is a deeply concerning pattern that shows no sign of abating, and it raises the question of how long the government can afford to operate without drastic reform.So, what does this trend reveal about the state of governance in South Africa?
Beyond poor financial management, it signals a failure of leadership.
A lack of political will to hold departments and SOEs accountable has allowed a culture of mismanagement and corruption to flourish. If officials are not held accountable for their actions, the public will continue to bear the brunt of this ongoing crisis.
To reverse this trend, the government must take immediate action. Transparency and accountability must become the cornerstones of public service.
Strengthening audits, regular public disclosures, and independent oversight are key steps to ensuring that officials are held responsible for how taxpayer money is spent.
Additionally, a complete overhaul of South Africa’s procurement systems is long overdue. Streamlining processes, improving transparency, and ensuring that contracts are awarded fairly will help to curb corruption and ensure that funds are used where they are most needed.
Lastly, leadership must be held accountable. Public officials must understand that they are responsible to the people, not just their departments. There must be consequences for those who fail to adhere to financial regulations — including criminal prosecution for repeat offenders.
The financial mismanagement seen in the 2023/2024 financial year cannot be allowed to continue unchecked. South Africa is at a crossroads: if action is not taken soon, the fiscal burden on citizens will only increase.
The government must address this crisis head-on, or it risks further erosion of public trust and a continued drain on the country’s financial resources.
Regards,Mr. Pikolomzi Qaba
BUSINESS REPORT