South Africa: Mechanism To Monitor COVID-19 Expenditure Set Up

The KwaZulu-Natal Provincial Treasury has set up a mechanism to monitor how provincial departments, municipalities and public entities are utilising the COVID-19 procurement fund.

Delivering his department’s R718.763 million 2020/21 Budget Vote on Wednesday, Provincial Treasury MEC, Ravi Pillay, reiterated that the department cannot do the procurement itself, as departments remain responsible and respective Accounting Officers remain accountable.

“The Provincial Treasury has started monitoring expenditure related to COVID-19 by municipalities, public entities and departments.

“Risks such as the possible purchase of items not related to COVID-19, while using the emergency procurement regulations and instruction notes, have been identified,” Pillay said.

As part of government’s response to the pandemic, President Cyril Ramaphosa in April announced a R500 billion economic support package. Part of this was a reprioritisation of R130 billion from national and provincial budgets. Of that, R30 billion is being reprioritised from the provincial budgets, with KwaZulu-Natal’s share of that amount being R6.2 billion.

The Provincial Treasury’s main tasks during this time of the COVID-19 crisis, Pillay said, is capacitating Supply Chain Management on the new COVID-19 emergency procurement regulations.

“We are acutely aware of the risks that are already manifesting themselves. We will undertake the training of Supply Chain Management to ensure that departments can procure commodities on an emergency basis, in line with the emergency procurement regulations, without compromising on quality, specifications and value for money,” said the MEC.

Pillay predicted that the COVID-19 pandemic could catapult unemployment in the province to an unprecedented 40% from the current 25%.

“Our preliminary projections as Provincial Treasury suggest that the effects of COVID-19 will be detrimental across all sectors of the economy in KwaZulu-Natal,” he said.

However, the hardest hit industries include manufacturing, construction, wholesale, retail, hotel, finance, real estate, business services and personal services.

“The scourge of COVID-19 is expected to cause the overall demand for goods and services to drop by about 7.5% in the province. The provincial GDP is expected to contract by approximately 8.5%, with employment falling by a staggering 14.6% this year.

“It is therefore critical that we are not distracted from the tasks at hand. The infection peak is yet to come. The economic crisis will deepen. The Provincial Government of KwaZulu-Natal has been hard at work, rolling out the four pillars of our response,” said Pillay.

On one hand, the department will have to meet the demands of the public health response ahead of the anticipated peak of the wave of infection.

“On the other hand, we must mitigate the economic loss and prepare the ground for a sustained economic recovery. This requires a very special, united and collective effort,” said the MEC.

Worldwide, the pandemic has exposed the faultlines in society between the rich and poor.

“In our country, this is an exceptionally serious faultline, with a toxic overlap between race and inequality. All our measures in response to this crisis must also be underpinned by principles of transformation.

“We are encouraged that all levels of society seem to understand and accept this imperative. It has to be economic recovery and economic transformation. We can only achieve this together,” Pillay said.

Guided by the Public Finance Management Act (PFMA) and the Municipal Finance Management Act (MFMA), Provincial Treasury will continue to strive to be the ‘Guardian of the Public Purse’, he said. –

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