Parliament’s standing committee on public accounts (Scopa) chair Songezo Zibi has warned that SA risks losing its sovereignty if it does not change its spending culture, fight corruption and drive efficiencies to improve service delivery and realise much-needed economic growth.
If wasteful expenditure were nipped in the bud, “it seems possible to save up to R100bn over the next three to five years — money that can be redirected towards service delivery and growing the economy”.
“This means we must drive efficiencies hard, stretching every rand to go as far as possible. We do not have the luxury of borrowing more, or taxing more,” Zibi said.
“We must now focus obsessively on driving a culture of prudent expenditure in government, and government auditors will become critical in achieving this goal as soon as targets are set, and new principles and systems put in place.”
Zibi made the remarks on Friday at the audit and finance indaba of the Southern African Institute of Government Auditors, nonprofit professional body aimed at advancing auditing and accountability.
The Rise Mzansi national leader chairs what is effectively government’s audit committee in Scopa, which is tasked with overseeing trillions of rand in government expenditure.
“It is not an easy task... we rely on the auditor-general and her team of professionals to enable and support our work. They do a sterling job and serve parliament most faithfully,” Zibi said.
“So, in a sense, government auditors play a significant role in helping the authorities stay within the bounds of the constitution and the promises they have made. There is another role auditors play, which most people including political authorities miss.
“Auditors are there to assist them, to protect them from their own impulses and weaknesses that may otherwise bring them into conflict with the very same people that voted them into office.”
He said the public needed further transparency in respect of government expenditure, adding the Treasury would appear before Scopa in April/May to share the outcomes of their expenditure reviews.
“These reviews have identified areas of wasteful expenditure where the government has paid far above market rates or the expenditure is unnecessary, or the fiscal investment does not produce the desired outcome,” he said.
“Having seen some of the underlying data, it seems possible to save up to R100bn over the next three to five years — money that can be redirected towards service delivery and growing the economy.”
Zibi said he agreed with those criticising the recently tabled 2025 budget as not sufficiently providing for growth.
Finance minister Enoch Godongwana announced on Wednesday the Treasury opted for a half a percentage point hike in each of the next two years, with the proposed increases set to generate R13.5bn in revenue in 2025/26, R30bn in 2026/27 and R32bn in 2027/ 28.
“Our total income expected is R1.97-trillion. The finance minister’s total budget proposal is R2.6-trillion. R823bn is for salaries, or 42% of the budget. R424bn will go towards debt servicing costs, so we are talking about R2.17-trillion of expenditure, still a lot of money. But I mention the debt figure because it is also a lot of money, R35.3bn per month,” said Zibi, a former Business Day editor.
Government debt rose from R1.79-trillion in 2014/15 to R5.26-trillion in 2023/24. “Measured in inflation-adjusted terms, the burden of public debt per working-age individual climbed from R70,074 in 2014/15 to R114,976 in 2023/24, while real interest costs per individual jumped from R4,472 to R7,785 over the same period,” Zibi said.
“During this decade of economic underperformance, real GDP per person fell from R80,046 to R74,599, underscoring how economic stagnation intensified pressure on households and the broader economy.”
The Rise Mzansi leader noted SA had an expenditure problem and was stuck in a “moral cul-de-sac of the country’s own making”.
“I think most South Africans who should know better also labour under the false belief that there is lots of money to spare. There isn’t. And if we do not change the culture of spending, fight corruption and drive efficiencies we are going to end up on an IMF [International Monetary Fund] programme in our lifetime, and SA will lose its sovereignty.”
It was time for tough decisions, the Scopa chair said, noting the R350 social relief of distress grant costs the fiscus R35bn per year.
“What would happen if we invested that same amount of money in economic development and entrepreneurship programmes for young people and women in particular? Maybe we would get better and more sustainable multipliers than R350 per person per month?” he said.
The country had a choice to make about composition of spending: “We have to move to a situation where annually, the government is able to invest R300bn to R400bn per annum back into the economy, but that requires that we do not spend so much on salaries, waste and social protection driven by unemployment.”
The government must choose to put the money into growing the economy rather than mere survival. “I have no doubt these decisions, such as VAT, would become unpopular but they have to be taken soon otherwise one day we will pay so much for debt and salaries we will not have anything to invest in the economy.”
The cabinet announced on Thursday that it welcomed the budget and that increases in VAT would help finance SA’s sustainability.
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