SA seeks measures to fast-track spending by towns

South Africa is weighing measures to accelerate spending by its towns and cities that are struggling to provide basic services such as water and electricity.

The government may allow municipalities to front-load expenditure on infrastructure so they can use all the funding allocated for a three-year period in the first 12 months, Finance Minister Enoch Godongwana said in an online address Thursday.

Towns and cities are underspending on things like roads, water, sewerage and electricity works and that hampers service delivery in areas where the government already struggles to provide the basics, resulting in violent protests and sporadic attacks on foreigners. South Africa suffered its worst riots since the end of apartheid last July, in part driven by the lack of services.

While much of the rioting “was driven by criminal elements, it found fertile ground in the desperate economic situation faced by many of our people,” Godongwana said. “One way to overcome these challenges to delivering basic services, and to unlock the potential for high-growth activities, is for municipalities to improve and maintain their infrastructure.”

Municipalities spent R35.4 billion ($2 billion), or just over half the money, allocated to them for capital expenditure in the three months through March, compared with R20.3 billion, or 29.5%, in the prior quarter, Treasury data show.

Authorities in South Africa’s nine provinces should focus on health, education, roads and agriculture while municipalities must prioritise investing in bulk infrastructure to provide electricity, water and refuse removal, Godongwana said.

Earlier, this year National Treasury issued a Diagnostic Review aimed at developing the capability of the state to support local-level governance.

The Treasury will provide more details on the government’s plans to support high-growth activities through infrastructure investment in the medium-term budget policy statement in October, Godongwana said.