Between 2008/09 and 2011/12, compensation and goods and services budgets grew in real terms by 8.4 per cent and 5.1 per cent respectively. After the introduction of the expenditure ceiling in 2012, real spending on compensation of employees averaged 2.5 per cent over the period 2012/13 – 2015/16 and is projected to fall to 1.1 per cent real growth over the 2016 MTEF. Goods and services spending has also been sharply reduced, with non-essential items such as travel, subsistence, catering and entertainment declining in real terms. Over the 2016 MTEF, total goods and services spending is projected to grow at 0.6 per cent in real terms.
As a share of total consolidated spending, compensation has declined from 36.1 per cent to 35.3 per cent between 2012/13 and 2014/15. Goods and services spend has declined from 17.1 per cent to 16.8 per cent over the same period. From 2016/17 onwards, government will close its current deficit – the difference between current revenue and spending on compensation, goods and services, interest, and current transfers and subsidies. The resultant savings are expected to reach 1.7 per cent of GDP in 2018/19, equivalent to 44 per cent of government’s budgeted capital spending.
Project name |
Date |
Contract duration |
Project value (R billion) |
Statistics South Africa Head Office Accommodation PPP project |
April 2014 |
25 years |
10.3 |
Independent Power Producer’s Programme 3rd window submission |
December 2014 |
20 years |
26* |
Municpal capital expenditure funded through borrowings |
2014/15 financial year |
- |
9.4 |
Municpal capital expenditure funded through borrowings |
2015/16 financial year |
- |
12.1** |
Total |
57.8 |
NB: Most State Owned Companies finance their Infrastructure programmes from their own revenue and borrowings backed by government guarantees and they are excluded from a list of the above mentioned projects.
* PThe programmeis funded by private sector capital raised from financial institutions. The private sector takes the risk associated with the completion of the project and it in turn benefits from unitary payments made by Eskom/government over the duration of the project.
**Planned borrowings for the entire year ending in June 2016.
The table above shows some of the projects where the private sector has provided financing. Some are PPP projects whereas others are municipal projects.