2019/20 PROVINCIAL BUDGET SPEECH PRESENTED BY

MS. MOTLAPULA ROSHO, MEC FOR FINANCE AT THE NORTH WEST

PROVINCIAL LEGISLATURE ON 04 JULY 2019

Honourable Speaker, Ms. Susan Daantjie

Honourable Deputy Speaker, Ms. Viola Mocumi
Honourable Premier, Prof TJ Mokgoro
Honourable Members of the Executive Council
Honourable Members of the Provincial Legislature
Executive Mayors and Mayors of Municipalities
Modulasetilo wa Ntlo ya Dikgosi, Kgosi Moshe Mabe
Chairpersons and Board Members of Public Entities
Administrators, Heads of Departments and CEO of State Owned Entities
Distinguished Guests
Bagaetsho, Dumelang

Honourable Speaker, on the 5th of March 2019, the former MEC for Finance,
Economy and Enterprise Development stood on this podium and
introduced the 2019 Appropriation Bill to this House. This was done in line
with section 27 (2) of the Public Finance Management Act (PFMA). As we
are all aware, subsequent to the general elections held on the 8th May
2019, the Premier of North West, Honourable Prof Mokgoro reconfigured
the provincial departments in line with the Constitution of the Republic of
South Africa.

The reconfiguration of the departments has necessitated the withdrawal of

the Bill which was tabled in March 2019 and the introduction of the aligned
2019 North West Appropriation Bill. The process of reconfiguration entails
movement of functions from one department to another and is envisaged to
improve efficiency, well-coordinated and integrated government operations
which will lead to improved service delivery.
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In preparation of this new Appropriation Bill, the Provincial Government has
commenced with the process of ensuring that the 6th Administration
priorities as outlined in the State of the Nation Address and the State of the
Province Address are incorporated in the 2019 MTEF Budget.

Honourable Speaker, this Bill is tabled in line with the principle of “funds
follow functions” aligned to Proclamation No. 8028 and as such the
following elements as contained in the State of the Province Address as
pronounced by the Premier remain the focus areas:

 Unemployment (Grow the economy and creation of jobs)

 Provision of water and sanitation,
 Improvement of roads with specific emphasis on rural areas,
 Provision of housing,
 Effective delivery of quality health services,
 Fighting crime and corruption, and
 Facilitate access to quality education and land

Mmusakgotlha, re tlhoka go ikamanya le moono wa ga Tonakgolo Rre Job

Mokgoro fa a ne a re ”Sechaba sa Bokone Bophirima se re neile
maikarabelo a bo-kgajane le botshwara teu, pholo tsa rona di
gokeletswe mo megomeng, pelesa mo letlhajaneng. Re goga morwalo
re semeletse re a lema”. The department therefore, embraces the
profound commitment made by the Honourable Premier and we confirm
that as a department we are equal to the task.

Honourable Premier also reiterated the Presidents’ call towards the

country’s seven main growth priorities which will be a focal point for the
next five to ten years. The priorities are:

 Economic transformation and job creation

 Education, skills and health
 Consolidating the social wage through reliable and quality basic
services
 Spatial integration, human settlements and local government
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  Social cohesion and safe communities
 A capable, ethical and developmental state
 A better Africa and World

Honourable Speaker, the latest statistics show that the provincial

economy has only grown by 0.19 per cent in 2018 compared to the national
growth rate of 0.8 per cent which also reported a Gross Domestic Product
(GDP) decline of 3.2 per cent in the first quarter of 2019. These growth
rates are lower than the planned annual growth rate of 5.6 per cent that is
believed to be significant enough to half unemployment and poverty by
2030.

The provincial population is growing at an annual rate of 1.62 per cent and
it is projected to increase from the current 3.85 million people to 4.06
million between now and the next two years. This growth rate is much
faster than the economic growth rate, which means that our people are
getting poorer, and therefore are justified to expect much more efficient,
coordinated and integrated delivery of services from the provincial
government. About 60 per cent of the population live in poverty and are
mostly located in rural areas. In addition, the Province is experiencing
rapid urbanisation and migration of poor people especially in the two
districts of Bojanala and Dr. Kenneth Kaunda. This is creating service
delivery pressures for secondary cities located in those districts.

Honourable Speaker, it is important to indicate that low income

households and small businesses are severely affected by the hardships of
the underperforming provincial economy. Over the years, the administered
prices for commodities that are necessities for households and critical
production inputs for small businesses have increased faster than the
inflation rate. For instance between 2018 and 2019, the price of electricity
increased by 13.8 per cent and water tariffs increased by 14.6 per cent.
The average petrol price increased from R6.92 per litre to R16.57 a litre
between June 2008 and June 2019 while average wage rates grew by
inflation rate or lesser.

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Honourable Speaker, the Premier has clearly outlined the provincial
initiatives that seeks to stimulate provincial economic growth through
collaborative effort between government and private sector in all areas
across the province. Resultantly, the budget I am about to table serves as
a means towards mitigating the current surmountable service delivery
challenges as well as creating a conducive economic environment for the
public and private sector involvement.

In our quest to improve the living conditions of our people, we commit to

broaden community participation, with specific reference focus to
designated groups (youth, women and people with disabilities) in the
economy through creation of employment and business opportunities. This
budget further seeks to accelerate the provision of quality education, health
care, decent housing, water, sanitation, roads and other services. This
coupled with the provision of a decent social wage to our people, will have
a greater impact on reducing poverty and inequality that is prevalent in our
Province. Greater efforts will need to be directed towards the Dr Ruth
Segomotsi Mompati and Ngaka Modiri Molema Districts since these two
have a GDP per capita lower than that of the other two districts and of the
provincial average.

Mmusakgotlha, e tsentse tlhako mo kgamelong. Maemo a ikonomi a

bokete mme le fa go le jalo, re tlhoka gore mo gare ga yona tobetobe e, re
ntshe ditlhogo mme re tseye karolo go bona gore baagi ba rona ba bona
thebolelo e e lolameng ya ditirelo. Go botlhokwa gore re nne le mananeo a
a kobisitseng go fitlhelela maitlhomo a a tla re kgontshang go rebola ditirelo
le go tsaya karolo mo mananeong a ikonomi naga ka bophara.

Honourable Speaker, Provincial Treasury together with Office of the

Premier will ensure implementation of reconfiguration of departments and
public entities takes place without any interruptions on service delivery.
Provincial Treasury has already completed the re-alignment of the
Provincial Budget and is progressing well with changes to provincial
financial systems and related banking arrangements.

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The Provincial Treasury has introduced programmes which promote
monitoring and enforcement of Audit Actions Plans to ensure that
Departments and Public Entities are held to account and provide the
Executive with measures to prevent repeat findings and achieve improved
audit outcomes. Such measures will include but not limited to withholding of
funds where there are no improvements in the audit action plans that
Departments and Entities have committed to implement, and these funds
will be redirected to service delivery programs.

Honourable Speaker, the Sixth Administration is resolute and will deal

decisively with irregular expenditure as follows:

 In line with Premier’s pronouncements, the Provincial Treasury has

commenced with the pre-audit of bids/tenders in excess of R10 million
to provide assurance and limit potential irregular expenditure
timeously before the awarding of the bids. This will improve
accountability in the bidding processes;
 Relentless oversight with punitive measures to culminate into
consequence management will be intensified by conducting
investigations, identifying loss to the state and holding officials
accountable;
 Investigative capacity will be established in Provincial Treasury to
assist Departments and Entities to conduct independent
investigations and fast track recommendations relating to current and
previous years irregular expenditure;
 Funds will be withheld where continuous transgressions are identified
in Departments and Public Entities to limit further incurrence of
irregular expenditure;
 In partnership with the Public Service Commission, the Provincial
Treasury will inculcate a culture of ethics to promote behavioural
change in the Public Service;

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 Approval of deviation and variation will no longer be automatic and be
subjected to stringent scrutiny effective from today. The Provincial
Treasury will intensify the assessment for the approval and where it is
found to have been implemented without due consideration and
approval, responsible officials will subjected to financial misconduct
and external stakeholders to recovery of the loss.

Honourable Speaker, during the last quarter of 2018/19 financial year,

Provincial Treasury, in collaboration with National Treasury, conducted
Supply Chain Management (SCM) competency assessment of all officials
in SCM units of all Departments, Public Entities and Municipalities. The aim
of the exercise was to identify skills gaps and implement training and
capacity building interventions. The identified capacity building intervention
programs will be rolled out in the third quarter of 2019/20 financial year.

The Provincial Treasury has embarked on a process to professionalize

SCM in the North West Provincial Administration. In responding to this,
SCM Practitioners have been registered with the Chartered Institute of
Purchasing and Supplies (CIPS). National and Provincial Treasury finalized
Supply Chain Management Framework and is already rolled out to
Provincial Departments and Public Entities for implementation. The
framework enforces Provincial Departments and Public Entities to have
capacitated SCM units including dedicated contract management
components.

As per the Premier’s announcement, the Instruction note which monitors

the sub-contracting and the reduction of the threshold from R30 million to
R10 million given our rural nature and the socio-economic conditions will be
issued during the second quarter of the current financial year. This process
is intended to benefit businesses owned and operated by people from
designated groups (women, youth, people with disabilities).

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Working together with the Department of Trade and Industry, Department
of Economic Development, Environment, Conservation and Tourism and
Provincial Treasury will identify and set aside some locally manufactured
products to be procured by government and its entities. This process
intends to empower SMME businesses operated by designated groups
(women, youth and people with disabilities).

Honourable Speaker, the Premier expressed his concern regarding the

audit outcomes of municipalities based on the recent report by the Auditor-
General (AG). In responding to the Auditor General’s report on 2017/18
Audit Outcome, Provincial Treasury in collaboration with National Treasury,
is rolling out a municipal finance improvement programme. This National
initiative complements the Provincial municipal support strategy to support
efforts of municipalities to improve their Audit Outcomes.

The Provincial Government remains committed to support and strengthen

the capacity of municipalities to management its own financial affairs.
Provincial Treasury implemented the contract management support
programmes with resources deployed to all 22 municipalities. The objective
of the contract management support programme is to support
municipalities to establish effective contract management systems and
develop a consolidated municipal contract register for effective monitoring
at provincial level.

Honourable Speaker, Provincial Treasury will work together with National

Treasury and Department of Cooperative Governance and Traditional
Affairs to enforce general financial management compliance in line with
section 62 of the MFMA to improve accountability and address the
following in municipalities
 Weak/Collapsed Control Environment;
 Non-Compliance to Laws and Regulations;
 Implementation of Standard Operating Procedures to address Non-
Compliance to key financial management practice;

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Provincial Treasury will aggressively deal with any municipality that fails to
comply with applicable laws and regulations which amongst others include
withholding of grants in particular Equitable share, in line with Section 216
of the Constitution of the Republic of South Africa. Specific non Compliance
with the following will be subjected to the above actions:

 Municipalities that adopted unfunded budget and deliberately ignored

recommendation of the Provincial Treasury;
 Municipalities that flaunts SCM processes and regulations;
 Mismanagement of financial resource that results in no value for
money;
 Mismanagement of conditional grants funding;
 Tighten the policies and implementation that relates to the abuse of
overtime in all municipalities and report quarterly on the matter for
corrective measures.

The Provincial Fiscal Framework

Honourable Speaker, the main source of funding for the provincial budget
remains the equitable share amounting to R112.992 billion over the MTEF
period. Conditional grants allocation contributes 17 per cent to the
provincial budget with the total budget of R23.825 billion and Provincial
Own Revenue contributes 3 per cent or R3.944 billion over the MTEF. The
2019 MTEF budget amounts to R141.016 billion of which R44 billion will be
spend in the first year of the MTEF (2019/20).

Honourable Speaker, the allocations for provincial departments have no

material changes to the previously tabled appropriation except
incorporating transfer of functions through the implementation of the
principle of funds follow functions. In addition, Members of the Executive
Council will provide more details on programmes and plans of action for
their respective votes when tabling the vote speeches later this month. The
allocation to the following departments and institutions have not been
affected by the reconfiguration:

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 The Provincial Legislature receives R486.9 million in 2019/20,
R484.5 million for 2020/21 and increasing to R511.7 million in
2021/22 financial year. This allocation will enable the Legislature to
strengthen its Constitutional responsibilities around good governance
and to fulfill its oversight role. Furthermore, the allocation also caters
for maintenance of the Provincial Legislature building.

 The budget to the Department of Health remains R12.3 billion for

the 2019/20 financial year growing to R14.4 billion in the outer year of
the MTEF. This allocation will ensure provision and continuous
improvement of health care service in the province. Furthermore, the
allocation will assist in preparing the department for the rollout of the
NHI once the bill is passed by parliament. The allocation further
allows the Department of Health to focus more on maintenance of
health facilities in the province.

 Department of Community Safety and Transport Management

receives an allocation of R2.265 billion in 2019/20, R2.388 billion for
2020/21 and R2.518 billion for 2021/22. Of this amount, an amount of
R412.162 million has been set aside in 2019/20 for learner transport,
that accumulate to R1.375 billion over the MTEF period.

The Provincial Treasury embarked on an extensive learner transport

verification process during the month of April and May. This process
has been concluded and the recommendations of the report will be
implemented in due course.

 Department of Public Works and Roads receives R3.2 billion in

2019/20 financial year, R3.3 billion in 2020/21 and R3.5 billion in
2021/22 financial year. Given the high level of unemployment in our
province, the emphasis of the 6th Administration is Jobs, Jobs and
Decent Jobs. During the 2019/20 financial year and going forward,
the Department of Public Works and Roads will ensure promotion of
labour intensive and contractor development when implementing
infrastructure projects.
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  Through the process of reconfiguration, the name of the Department
of Finance has been amended to align with Section 17 of the Public
Finance Management Act which stipulates that there is a Provincial
Treasury for each province consisting of the MEC for Finance and
the department responsible for financial matters. Consequently, this
Department is allocated R528.7 million in the first year of the MTEF to
continue with its oversight responsibilities with regard to financial
matters in departments, municipalities and entities. This allocation
increases to R652.4 million in the outer year.

Honourable Speaker, the following departments have been affected by

the reconfiguration process and their budget allocations are as follows:

 The Office of the Premier allocation includes funding for special

programmes which have been moved from Department of Social
Development. Consequently, the Office of the Premier is allocated
R671.4 million in 2019/20 financial year increasing to R722.3 million
and R765.6 million in the two outer years respectively.

 The Department of Arts, Culture, Sports and Recreation receives

an amount of R789.8 million in the first year accumulating to R2.478
billion over the MTEF. Notably, the department received the sports
and recreation functions from the Department of Education and
relinquished the Traditional Affairs function to the Department of
Cooperative Governance and Traditional Affairs. This allocation will
assist the department to contribute to the provincial economic growth
by creating job opportunities in cultural and creative industry.

 Department of Economic Development, Environment,

Conservation and Tourism receives R986.4 million in 2019/20
financial year, R1.026 billion in 2020/21 and R1.082 billion in 2021/22
financial year. Included in this allocation funding for promotion of
tourism from the former Department of Tourism and also funding for
environmental services and conservation from former department of
Rural, Environment and Agricultural Development.
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 The Department of Education remains the biggest beneficiary of the
provincial budget with an amount of R17.1 billion allocated in 2019/20
financial year.

The allocation of this department constitutes 38.9 per cent of the

provincial budget. Cumulatively, the department will receive R55.2
billion over the MTEF period. From the 2019/20 allocation, an amount
of R1.333 billion will be transferred to schools with public ordinary
schools receiving a bigger share of R981.097 million.

 The Department of Social Development relinquished the Special

programme to the Office of the Premier. Consequently, the
department receives an amount of R5.6 billion over the MTEF period
with R1.7 billion in 2019/20 financial year. This allocation will ensure
that the department continues to implement programmes that are
geared towards the protection of the rights of women and children.

The environmental services and conservation moved from the

Department of Rural, Environment and Agricultural Development.
Consequently, the Department of Agriculture and Rural Development
is allocated R1.2 billion in 2019/20 increasing to R1.3 billion in the
outer year. It is important to note that agriculture in our Province
contributed 3 per cent to the Provincial GDP in 2017. This allocation
is therefore intended to stimulate economic growth through
investment in amongst others farmer support and Agro-processing.

 The Department of Cooperative Governance and Traditional

Affairs has been allocated R1.7 billion over the MTEF, with R539.7
million allocated in the first year of the MTEF. This allocation will
assist the department to strengthen the governance relating to
Traditional leadership in the Province. Furthermore, in view of the
challenges experienced in our municipalities, the allocation will
ensure filling of critical positions which would improve interventions in
municipalities and thus improving governance and service delivery.
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 Water is a scarce commodity in the Province and the country at large.
To this end, a number of projects have been funded through the
Departmental allocation as well as indirect grant to the tune of R115
million in 2019/20 in order to deal with this challenge. Over and above
the National Department of Water and Sanitation allocation, the
Province has availed a further R227 million over the MTEF to
intervene in water and sanitation challenges throughout the Province.

 The Department of Human Settlement receives an allocation of

R2.2 billion for 2019/20 financial year accumulating to R6.6 billion
over the MTEF period. This department is mainly funded through the
Human Settlement Development Grant. In addition, to ensure that our
people become rightful owners of their houses, an amount of
R50.388 million and R53.160 million has been allocated in the first
two years of the MTEF to deal with title deeds.

Honourable Speaker, subject to the finalization of the review process of

the Infrastructure Delivery Management System (IDMS) and the Publication
of the Framework for Infrastructure Delivery and Procurement Management
(FIDPM), the perpetual underperformance affecting service delivery to our
people can no longer be tolerated.

The Provincial Government in implementing EPWP as a flagship

programme aimed at addressing unemployment and poverty alleviation will
be biased towards Women, Youth and People with Disabilities. To this end,
this programme is anticipated to create an estimated 38 000 (24 000 is
provincial contribution and the balance of 14 000 relates to municipalities)
work opportunities in the current financial year and it is the Province
intention to double the numbers over the MTEF by strengthening
monitoring and reporting on this programme

Honourable Speaker, in support of the provincial government cost

containment efforts and in line with Hon Premier’s pronouncement, the
directive of alternative building and road material where 30% of the new
infrastructure budget should be directed towards this initiative, effective
from today.
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No new infrastructure should be created without considering the use of
alternative building and road material. Any deviation from this policy
statement should be motivated and lodged with the Office of the Premier
and Provincial Treasury for consideration and approval.

Honourable Speaker, to demonstrate government commitment to

resolving the office accommodation challenges coupled with reduction of
expenditure on leases, the Department of Public Works and Roads is
expected to table detailed implementation plan on accommodation for
approval to Executive Council before end of August 2019. Such an
implementation plan must ensure that all challenges would be resolved
before end of the current financial year.

To ensure that we do not lose any opportunity for job creation, the
Provincial Treasury will be putting systems in place to assess all tenders
that would explicitly outline labour intensive programmes, training and
contractor development as a requirement, including penalty clauses for
non-compliance by contractors as well as crafting a monitoring system to
track all employment opportunities created.

In this instance, programme managers will be expected to upload

employment statistics on a monthly basis including matters relating to
sub-contracting, deviation and variation and spending on alternative
building material. This programme will be closely monitored by Provincial
Treasury to ensure that the Province tracks all jobs created. Our focus
areas on roads will be to ensure that most of our economic, eco-tourism,
agricultural and access routes are trafficable to facilitate economic growth
and development in the Province.

Honourable Speaker, we further commit to improve on the speed,

consistency and the quality in attending to maintenance and upgrade
needs of our roads as expected by our communities. In addition, we will
explore more efficient, effective and economic methods of delivering quality
roads infrastructure, cutting down on rehabilitation and upgrade costs per
kilometre.
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In our efforts to create opportunities for the youth, an amount of R40 million
has been allocated to the Department of Public Works and Roads in the
current financial year. This allocation is geared towards supporting the
implementation and expansion of the National Youth Service Programmes
and funding Cooperative contracts for skills transfer, experiential learning
and capacity building. This amount excludes the R12 million allocated to
the YES entity in the Office of the Premier which details on its programmes
will be announced by the Hon Premier during his budget speech.
Government will continuously monitor the work done by all the departments
on programmes relating to youth development and will report quarterly to
the youth of the Province on the progress registered.

Honourable Speaker, in our endeavour to provide effective delivery of

quality health services in the Province, an amount of R700 million is
allocated to the Department of Health over the MTEF. The allocation is
earmarked for the upgrading and maintenance of health facilities for the
implementation of the National Health Insurance (NHI).

In support of the Presidential Pronouncement an amount of R191 million

has been set aside in the current financial year to address the sanitation
challenges in our schools. In order to improve the condition of our roads
with specific emphasis on rural areas, an amount of R984 million has been
allocated to the Department of Public Works and Roads over the MTEF for
upgrading the roads.

Considering the current infrastructure delivery challenges in the Province

ranging from under spending, increasing accruals, huge project cost and
time overruns we remain resolute that we will implement the “No Plan No
Budget” approach and only projects that are ready for implementation will
be funded moving forward.

Honourable Speaker, the process of reconfiguration and realignment of

the Provincial Departments has also affected their entities. This process of
rationalization of Public entities is envisaged to improve efficiency,
well-coordinated and integrated operations leading to improved service
delivery.
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The process of merging Mmabana and Provincial Arts Council has been
concluded. The process of merging Parks and Tourism Boards into one
entity has commenced and will be concluded in the current financial year
including the listing of the merged entity with National Treasury. The two
entities are now housed in one department while the process of finalizing
all legislative and regulatory requirements unfolds. This process will also
entail the relocation of Dirapeng from NWDC to the envisaged merged
entity. This August House will be updated about all the developments
relating to the rationalization of public entities.

Honourable Speaker, the Province will be transferring a total amount of

R602 million to entities in the current financial year and government
remains concerned about the state of governance and financial
management in these entities which can no longer be tolerated. To mitigate
against this deteriorating state of affairs within our entities, transfer
agreements will include conditions that should be met by all entities for
improved governance and financial management.

Honourable Speaker, I am confident that effective implementation of this

budget will ultimately improve service delivery and stimulate our economy to
grow and create much needed jobs. For successful implementation of this
budget, we need cooperation, support and dedication from all role players.

Honourable Speaker, as I conclude, I want to emphasise the importance

of spending budget according to plans within the financial year. Allocations
of Departments that do not spend accordingly, will be redirected towards
critical service delivery priorities.

Honourable Speaker, in line with clarion call made by President

Ramophosa during the launch of the ruling party manifesto of “growing the
economy together”, the Provincial Government has agreed to convene the
following two important engagements in August which are geared towards
the implementation of our integrated programmes relating to job creation
and stimulation of economic growth in the Province:

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  Economic Growth and Jobs Summit;
 Integrated Infrastructure Planning and Implementation Lekgotla

Further details will be communicated by the relevant departments during

respective departmental budget speeches. I wish to reassure the people of
North West Province that despite the budget limitations, the budget
presented today is anchored on interventions to address shortcomings in
service delivery.

Honourable Speaker, please allow me to express my appreciation for the

guidance and support received during the compilation of the 2019/20
budget to:

 Honourable Premier Prof. Job Mokgoro;

 Honourable Members of the Executive Council;
 Honourable Members of the Legislature;
 The Head of Department and Team Treasury (TT) for putting together
this important resource plan for implementation of government
programmes;
 Support staff in my Office and my family.

Honourable Speaker, allow me to table the following documents which I

have the honour to present to this August house:
 North West Appropriation Bill, 2019
 Estimates of Provincial Revenue and Expenditure
 A copy of the Provincial Budget Speech 2019

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2019 MTEF ALLOCATION
Medium Term Allocation

Departments R'000 2019/20 2020/21 2021/22

Office of the Premier 671 371 722 270 765 628

Provincial Legislature 486 864 485 486 511 745
Health 12 273 741 13 136 030 14 437 264
Arts ,Culture,Sports & Recreation 789 812 825 707 871 991
Community Safety and Transport Management 2 265 151 2 388 476 2 517 578
Economic Development, Environment, Conservation & Tourism 986 369 1 026 482 1 082 182
Provincial Treasury 528 722 589 473 652 471
Education 17 109 951 18 457 320 19 622 060
Cooporative Governance & Traditional Affairs 539 734 564 121 595 790
Human Settlements 2 216 515 2 222 396 2 262 925
Public Works and Roads 3 247 573 3 300 497 3 500 229
Social Development 1 747 033 1 889 701 2 006 305
Agriculture & Rural Development 1 165 711 1 240 777 1 313 031
Total Allocation 44 028 547 46 848 737 50 139 200

Ke a leboga! I thank you.

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