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March 03, 2010

The South African 2010 Budget—A Renewed Focus on “Service Delivery, Value for Money and Oversight”

Posted by Davina F. Jacobs 

Successful implementation of performance-based budgeting in South Africa has become more crucial in recent years, given the extremely tight revenue situation. That is a key message in a recent critique of the 2010 Budget. Experts from IDASA (a local independent public interest organization committed to promoting sustainable democracy) present their views and concerns in a recent paper titled “Budget 2010: Still a Rocky Road Ahead”, by Len Verwey, Saranne Durham and Musa Zamisa (attached below).

As the authors discuss, it was already clear in last year’s medium-term budget policy statement (MTBPS) of October that South Africa needed to make a substantial adjustments to its public finances over the next few years. Though the South African economy has formally moved out of recession, and though some indicators, such as household consumption expenditure, are improving, economic recovery will be slow. This means, of course, that the recovery of tax revenue will also be slow. Doing more with less, and how to actually achieve this, is therefore an important aspects of the 2010 Budget.

The emphasis in the Budget Speech on cutting out the "bells and whistles" in departments, and in reducing corruption, as well as on enhancing efficiency and service delivery, are refreshing. It is regrettably the case that, although South Africa did experience an economic as well as fiscal "boom" in the period 2004–08, many indicators of wellbeing and of human capacity development did not shift much over this period. Civil protests on the low quality of service delivery in the last few years have suggested poor performance of the public sector in providing for basic services such as electricity, water, sanitation, and housing.

Budget 2010 recognizes that the challenge for South Africa is to get more from less and to address governance challenges that impede the translation of resources into outcomes. The 2010–14 Outcome Targets presented recently by government, and included in the Budget Review, have the potential to strengthen accountability and therefore also efficiency. The outcome targets are, however, understandably broad. The more specific outputs, which are intended to give effect to the outcomes, are a much more useful means of overseeing government and assessing the success or failure of the budget in changing the lives of South Africans. However, to give real effect to such a performance-oversight framework the authors emphasizes that robust involvement of stakeholder and an ongoing conversation about what is being achieved and what is going wrong in the public sector are needed. It is therefore important that Parliament as well as civil society participate in monitoring and evaluation of government outcome and output targets. 

Download Budget 2010 Still a Rocky Road Ahead

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