Gauteng faces budget strain amid rapid population growth

Gauteng finance MEC Lebogang Maile says rapid migration and nationaleconomic pressuresare placing significant strain on the province’s R175.6bn adjusted budget, as departments accelerate spending to meet rising service delivery demands. Briefing the media on expenditure for the six-month period ending January 31, Maile said the province was operating within a constrained economic environment marked by slow growth, high unemployment and cost-of-living pressures, factors that directly affected provincial revenue. “If the national economy is not performing well and revenue collection declines, what comes to provinces and municipalities is affected,” he said.

“As of January, provincial receipts totalled R149.2bn, representing 83.7% of projected income. Overall expenditure stood at R144.4bn, or 82.2% of the adjusted budget adopted by the Gauteng Provincial Legislature,” he said. Maile stressed that Gauteng’s biggest structural challenge remained population growth.

About 230,000 people migrate to the province each year, including about 50,000 additional pupils entering state schools annually. “You may budget to build 10 schools, but demand requires 20. That affects not only how we spend, but how we perform,” he said.

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“The department of education has spent R58.6bn, or 85% of its adjusted budget, driven largely by scholar transport, school nutrition and municipal services.Scholar transportalone has been allocated R1.1bn this financial year, but rising pupil numbers continue to put pressure on the programme.” To address this, the province is exploring public-private partnerships (PPPs). Maile said about 3,600 buses were needed to fully meet scholar transport demand — an investment that would cost between R7bn and R8bn if government were to purchase them outright. He cited Gautrain as a successful example of the PPP model.

Built at a cost of R26bn, the rail system is now valued between R45bn and R53bn and will officially transfer fully to provincial ownership at the end of March after debt repayments are concluded. On transport finances, Maile confirmed that close to R10bn has already been paid towards settling Gauteng’s e-toll debt, which is managed directly by Treasury, with further repayments expected in June. While some departments faced risks of over-commitments due to rising demand, Maile said the provincial Treasury had monitoring systems in place to manage accruals and prevent uncontrolled overspending. Despite fiscal constraints, he said departments remained focused on pushing expenditure to improve service delivery and meet the growing needs of Gauteng residents.

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