Free State Announces MTEF Budget

By: Collen T Ndobo

The Free State MEC for Finance, Gadija Brown, has tabled the provincial Mid Term Expenditure Framework Budget on Tuesday, 07 July 2020. The revised budget was tabled following the country’s national disaster and intends to respond to the COVID-19 pandemic in the province.

Brown said that the impact of the COVID-19 pandemic on the provincial economy is anticipated to be severe. “Our provincial economy is projected to contract by 9.1 percent in 2020. The impact of this will be detrimental on our people, particularly in our endeavor to fight and combat the triple challenges of poverty, unemployment and inequality,” she mentioned.

However, according to Brown, the provincial economic growth rate is projected to recover to 2.2 percent in 2021. “Beyond 2021, the base effect on growth will wither and the province will record an average growth of 0.8 percent between 2022 and 2024, which is 0.5 percentage points below the national average growth over the same period,” she added.

Brown further mentioned that the official unemployment rate in the province was recorded at 38.4% in the quarter of 2002, making it the second highest in the country. The youth, aged 15 to 34 years, are the most vulnerable with an official unemployment rate of 52.2 per cent.

In her address, the MEC said that the province spent an amount of R5.424 billion or 13.7% from the budget of R39.503 billion at the end of May 2020 against the norm of 16.6 percent. The low expenditure recorded by the province was a result of the lockdown measures implemented by the country.

Brown emphasized the point of fast tracking the implementation of numerous projects in the province including student accommodation, the provincial government building, the legislature building, the N3/Villiers Trauma centre, Parys Hospital and Psychiatric Hospital.

“The Department of Trade and Industry will continue to fund the rehabilitation of both industrial parks in the province, Botshabelo and Phuthaditjhaba, whilst the next tranche of rehabilitation funding is set to be released during the new financial year. The final phase of the Botshabelo Industrial Park will be completed by the end of this year,” Brown said.

According to the MEC, the R700 million investments by Renergen in Lejweleputswa, which is anticipated to yield over 400 jobs in the province, and Coca Cola Beverages of South Africa, that has planned to invest R80m in manufacturing capacity will continue in the province. The province is working on ensuring that the investment framework is for industrialization and manufacturing.

The Free State province has initiated an intervention project for the investigation of irregular expenditure incurred in previous years in the department such as Health; Education; Agriculture and Rural Development; Sport, Arts Culture and Recreation; Human Settlements; and Free State Gambling, Liquor & Tourism Authority.

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