South Africa restores powers to Limpopo following financial turnaround

29 Jul 14

The South African government is returning powers to the province of Limpopo after the region succeeded in turning round its financial management and governance.

Financial management and supply chain problems in Limpopo led to the provincial government being suspended in 2011, with the national government taking over the running of the region.

The region had large accumulated unauthorised expenditure, which grew from R1.5 billion in 2009 to R2.7 billion 2011. As a result, the province was unable to pay teachers, doctors, nurses, social workers and other public employers.

The national government imposed corrective measures on five of the province’s departments: the Provincial Treasury, education, roads and transport, public works, and health and social development.

A National Executive Intervention Administrative Team was sent to Limpopo to implement emergency measures and ensure that the Provincial Treasury and the provincial government were able to deliver proper financial management, ensure fair and transparent procurement and deliver appropriate services.

In a statement released yesterday, the South African government said: ‘The Limpopo Province has turned the corner and its administration is in the process of being handed back to the Provincial Executive. There is a clear plan for the province to complete remaining tasks and deal with systemic challenges and risks. The National Executive will continue to play an oversight role as part of the transition.

‘The Cabinet decision to intervene in the Limpopo Province clearly demonstrates government’s commitment to clean administration and efficient service deliver that will result in achieving and sustaining a better life for all.’

Following the intervention, Limpopo’s Provincial Treasury now has a more efficient electronic accounting system in place, which is being rolled out in other provincial departments. The province’s financial position regarding cash, solvency and budget has also been stabilised and a new cash management process has been put in place.

However, the national government said outstanding challenges still need to be addressed, including a skills gap in financial management and infrastructure, weaknesses in supply chain management systems and a shortage of competent senior managers.