The massive under expenditure on conditional grants and capital which is largely for infrastructural spending flies in the face of government’s attempts to create jobs. It is common cause that infrastructural spending results in job creation. Government is its own worst enemy when it comes to job creation.

People are crying for houses. People are crying for decent schools. Yet the Eastern Cape continues to under spend capital expenditure and conditional grants. According to the six monthly treasury figures for the province, it has under spent against budget by R1 billion on conditional grants and R549 million on capital expenditure.

Last year’s massive under expenditure by Health (50% of its capital budget) and Education (33% of its capital budget) is set to repeat itself. The consequence of this is the long term deterioration of one’s assets. The Department of Health now faces a R1,9 billion maintenance backlog.


On the other hand, the province has overspent on personnel for the first six month by R889 million. Personnel costs are now running at 80% of the overall provincial budget if one takes the conditional grant component out. This dangerous trend means more and more is spent on personnel and less and less on service delivery.

What is truly alarming is that even though we spend more money on personnel, we continue to under spend on capital. People are paid to spend the capital budget but they are failing to do so. The reason why this continues to happen is that there are no consequences for non-performance.

The main culprits when it comes to over expenditure on cost of employees are Health (R388 million) and Education (R597 million).

When it comes to capital expenditure, the Department of Health has under spent by R168 million and Education by R350 million against budget.

Regarding conditional grants, Education has under expended against budget by R299 million on the education infrastructure grant. The other big culprit is housing that has under spent by R350 million against budget.

What this province cannot continue to engage in is smoke and mirrors accounting where under expenditure on capital infrastructure is offset by over expenditure on personnel. The books may balance but in the long term our infrastructure implodes.

What this province requires is tough leadership that can deal fearlessly with non-performers. The people of this province will continue to suffer. A DA-government will use the full force of the Public Finance Management Act to hold non-performers accountable.


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