Gauteng finance MEC Lebogang Maile has sounded the alarm over the finances of SA’s financial and economic hub saying the province faces a “liquidity crisis” that risks deepening if resources are not spent prudently.
Tabling his budget of R527.2bn over the medium-term expenditure framework (MTEF) at the Gauteng provincial legislature on Tuesday, Maile outlined the provincial government’s plans to maintain fiscal discipline and credibility while improving service delivery.
The plans include managing safety the economy, climate change and debt against the backdrop of a deteriorating fiscal position that is driven by declining revenue, mounting debt obligations, and an increasingly unsustainable wage bill”, Maile said.
“Liquidity pressures are escalating, with net cash balances projected to turn negative by the 2025/26 financial year”.
Maile called on provincial government departments to internalise fiscal constraints and align spending with the 2024-2029 Medium-Term Development Plan.
“Failure to act decisively — through expenditure oversight, keeping the overall wage bill under control and exploring alternative funding models — will risk deepening the liquidity crisis, threatening service delivery, and exposing the province to significant governance and fiscal risks,” he said.
The budget comes almost two weeks after President Cyril Ramaphosa visited the Gauteng provincial government, where he spoke out against recurring problems such as governance failures, financial mismanagement, crumbling infrastructure, crime and unreliable service delivery.
Gauteng, which contributes almost 40% to national GDP, remains dogged by high unemployment, violent crime, vandalism of infrastructure, poor roads, electricity and water networks, corruption, and at times dysfunctional service delivery.
It is also bogged in R20bn debt incurred by the now defunct e-toll road system. The first instalment of R3.8bn, which includes a maintenance portion of R546m was paid to the SA National Roads Agency (Sanral) in September 2024.
Maile said the budget was projected to grow at an annual average of 3% from R171.5bn in 2025/26 and by a further R171.5bn in 2026/27, before reaching R180.5bn in 2027/28.
The budget comprises transfers from the National Treasury, with the provincial equitable share set to grow by an annual average rate of 4% from R133.9bn in 2025/26, R138.9bn in the following year and R144.2bn in 2027/28. Conditional grant allocations are set to increase from R28.9bn in 2025/26 to R29.2bn in 2027/28.
According to the 2025 Budget Review, provinces need to improve the management of personnel costs, raise infrastructure investment and arrest the trend of rising accruals in the health and education sectors.
Maile said the adjustment in the data formula of the provincial equitable share has resulted in a decline in national government transfers to the province amounting to R6.2bn over the 2025 MTEF.
“However, this has been partially offset by the following amounts allocated by the National Treasury: R3bn over the MTEF to offset the budgeted allocation for public sector wage settlement; and a one-off allocation of R207m in 2025/26 for the Presidential Youth Employment Initiative, targeting the teacher assistants programme in the Gauteng department of education,” he said.
“The net effect of these developments, taking into consideration the additional allocations for the public sector wage agreement and the Teacher Assistant Programme, is an overall decline of R2.9bn in provincial equitable share over the 2025 MTEF.”
Maile said the provincial wage bill was the largest component of government’s expenditure, though he wants to keep it below 60% of overall expenditure.
“Accruals, together with irregular expenditure, fruitless and wasteful expenditure, contingent liabilities and over-commitments are the unwanted expenditures that we must do away with,” he said.
“Furthermore, in line with national directives, we will treat accruals as a first charge against department budgets, ensuring that no new spending is approved until outstanding obligations are settled.”
Of the R527.2bn, the Office of the Premier was allocated R569.2m in 2025/26 and R1.8bn over the MTEF.
- Gauteng Provincial Legislature R1.2bn in 2025/26, which grows to R3bn over the MTEF period.
- Economic development gets R1.6bn in 2025/26 and R4.9bn (MTEF)
- Health receives R66bn in 2025/26 and a total of R209.1bn over the MTEF
- R69.6bn for education, growing to R211.2bn (MTEF)
- Social development R5.5bn and R16.8bn (MTEF)
- Cooperative governance & traditional affairs and urban planning R551.4m, R1.7bn (MTEF)
- Human settlements R5.8bn, R16.6bn (MTEF)
- Roads and transport R9.7bn, R28bn (MTEF)
- Community safety R2.4bn, R6.8bn (MTEF)
- Agriculture and rural development R647.3m, R2bn (MTEF)
- Sport, arts, culture and recreation R1bn, R3.1bn (MTEF)
- e-Government R1.5bn, R4.8bn (MTEF)
- Provincial Treasury R787.8m, R2.4bn (MTEF)
- Infrastructure development R3.6bn, R10.8bn (MTEF)
- Environment R611.4m, R1.8bn (MTEF)
Maile said a province-wide accrual reduction strategy is being implemented, focusing on strict procurement discipline, upfront payment verification process, and “strengthened consequence management for officials responsible for financial mismanagement”.
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