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Boost for provincial budget

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"It is clear that there is a direct relationship between the sectors that contribute to our economy and the unemployment rate"

The Northern Cape MEC for Finance, Economic Development and Tourism, Maruping Lekwene. Picture: Danie van der Lith

THE PROVINCIAL budget has been increased by R187 million to R18,4 billion from the original amount of R18,3 billion that was allocated in March this year.

Delivering his mid-term adjustment budget speech yesterday, the MEC for Finance, Economic Development and Tourism, Maruping Lekwene, said that debt service costs, that already surpassed investment in social spending, remained the biggest expenditure item in the budget and was impacting on the ability of government to render services.

He urged all departments to “actively re-prioritise” their budgets in order to address the budget cuts, fund service delivery priorities and ensure quality of expenditure.

Lekwene stated that with a reduction in the Province’s equitable share, where the Northern Cape only received 2,6% of the national collected revenue, the Province still had to settle its debts, improve cash liquidity and provide services in a sustainable manner.

“To ensure that we sustain current levels of service delivery especially in health and education, we have applied a general cushion to all departments to minimise the impact of the cut. Of the total reduction of R260 million, a preliminary amount of R88.7 million is drawn down from reserves to cushion departments and ensure that services are not disrupted.”

He added that extreme tourism, diverse agricultural sectors, solar and renewable energy projects, enhancing ports of entry and railworks should be prioritised to boost the growth of the economy over the next two years.

Lekwene noted that the preliminary projections for 2018 indicated that the Provincial economy had decreased by 0,3%.

“The reduction was mainly attributed to the contraction of the agriculture sector by 3,9%, the mining sector by 2% and construction industry by 1,4%. It must be mentioned that the final figures will be released in 2020.”

He stated that the unemployment rate of the Province for the third quarter of 2019 was standing at 29,8%.

“This is slightly higher than the previous quarter. The increase in unemployment is mainly in the mining, construction, community and social service sector. It is clear that there is a direct relationship between the sectors that contribute to our economy and the unemployment rate. Thus it is essential that we intervene and prioritise the mining, agriculture and construction sector in order to create jobs.”