According to Public Expenditure and Financial Accountability assessments from 2008 and 2014, South Africa has maintained high levels of budget credibility at both the aggregate level and the individual vote level. The small variation recorded in these reports has been attributed to a strong link between budget formulation and execution. There does not appear to have been a more recent review or an assessment of budget credibility at the vote or sectoral level.
This brief explores challenges and improvements in South Africa’s budget allocation, implementation, and overall credibility and shows how these measures impact service delivery, poverty reduction, and progress toward the Sustainable Development Goals (SDGs). The brief analyzes South Africa’s budget allocation and execution in seven sectors related to 10 SDGs and covers the budget years 2018-19 to 2020-21. The brief also draws from South Africa’s 2019 Voluntary National Review, which offers a self-assessment and reflection on the impact of government policies and programmes toward attaining the SDGs.
While South Africa has made developmental progress since the advent of democracy in 1994, the country remains among the most unequal societies in the world, with extreme poverty and inequality and high levels of unemployment. Despite early and ongoing support for the 2030 Agenda for Sustainable Development, several acute challenges remain, and significant coordination, leadership, and improved accountability mechanisms will be required to realize Agenda 2030.
Goal 16 of the SDGs—on peace, justice, and effective institutions—recognizes that accountable and inclusive institutions are central to people’s wellbeing and underpin government efforts to reach SDG targets in other sectors. In particular, under target 16.6, which aims to “[d]evelop effective, accountable, and transparent institutions at all levels,” indicator 16.6.1 gauges budget credibility by measuring “[p]rimary government expenditures as a proportion of original approved budget, by sector (or by budget codes or similar).” This indicator relies on the South Africa: Budget Credibility and the Sustainable Development Goals methodology for measuring Budget Reliability in the 2016 PEFA framework, which assesses whether governments spend as intended in the budgets approved by legislatures. While data on indicator 16.6.1 currently reports budget deviations at an aggregate level, there is not yet a consolidated reporting mechanism for the indicator showing deviations in each sector. This means that many countries may not be tracking or identifying which sectors are effectively deprioritized during budget implementation.
Key findings include:
- South Africa has good credibility patterns on an aggregate level; however, at least two sectors—agriculture and gender equality—show consistent underspending trends.
- Some of the more significant deviations in 2020 were the result of additional support required to alleviate impacts of the Covid-19 pandemic, represented and explained in the 2020 supplementary budget; however, the final approved budget allocations were not published, so spending patterns were assessed against the initial allocation. Gender equality is analyzed using the allocation and spending for women in the Department of Women, Youth and Persons with Disabilities
- Challenges remain for achieving the SDG goals assessed in this brief, and most show a stagnating or declining trend, with the exception of gender equality, which, according to the SDG dashboard indicators, has improved. The persistence of Gender Based Violence in South Africa suggests that the indicator only provides a partial insight into issues of gender equality in South Africa.
- Although South Africa has not as yet fully implemented a gender-sensitive budgeting approach, various departments, led by National Treasury, are making progress with establishing the necessary guidelines and requirements to integrate the Gender Responsive Planning, Budgeting, Monitoring, Evaluation, and Auditing Framework into the budget process.
- Efficiency and effectiveness of expenditure remains a concern, and several challenges with regard to expenditure management (including poor internal controls, irregular expenditure; and fruitless and wasteful expenditure) could be contributing to poor alignment between budget allocation, spending, and SDG outcomes.
This publication is a part of Connecting Budget Credibility to the Sustainable Development Goals