Fiscal sustainability and the South African financial management challenge at national government level

[摘要] ENGLISH SUMMARY : The South African government is confronted with hard choices on how to harness financial management reforms while reducing costs associated with financial misconduct. The purpose of this thesis is to assess the credibility of national government budgets. The objective of this study involved providing an analysis of the three budgetary outcomes: levels of fiscal discipline, strategic prioritisation, and operational efficiency. The study found that while the budget acts as a key policy statement of the government, public expenditure management (PEM) acts as an instrument of government policy. It is used by the South African government to collect taxes and fund its projects, and emphasises the efficient and effective use of resources. The study further suggests that there are three mutually exclusive, complementary and interdependent basic budget outcomes of public expenditure management, namely financial discipline, allocative efficiency, and operational efficiency. In addition to these budget outcomes, accountability and transparency are secondary outcomes that are critical for public expenditure management.The research further attempted to highlight that the South African government is borrowing money to pay for current spending, a practice the researcher deems an unsustainable spending regime. The rigorous planning process of the Medium-Term Expenditure Framework (MTEF) is meant to ensure that allocations are made to government's priority areas such as education and health. Budget allocations are reflective of government's strategic priorities and the current broad policy framework, known as the National Development Plan (NDP). The shifting of funds in-year, known as virements, is counterproductive in view of the fact that funds are shifted from priority areas. Excessive spending in March coupled with under-spending by national government departments signifies weak financial controls and bad spending practices. The study concluded that financial misconduct is rampant in government and the situation is exacerbated by the absence of consistent and appropriate sanctioning of officials. The study also concluded that there is a requirement for institutions similar to the National Treasury, institutions that will ensure fiscal sustainability and prudential fiscal management.

[发布机构] Stellenbosch University