Presidency, National Treasury to save R27b in government rationalisation project

Thursday, February 9, 2023

The Presidency and the National Treasury will over the next three years work together to rationalise government departments, entities and programmes, in a move that is anticipated to see government achieve a R27 billion saving.

The development was on Thursday evening announced by President Cyril Ramaphosa while delivering the 2023 State of the Nation Address at the Cape Town City Hall.

He said: “National Treasury estimates that we could achieve a potential saving of R27 billion in the medium term if we deal with overlapping mandates, close ineffective programmes and consolidate entities where appropriate.”

To achieve any progress in addressing the urgent challenges the country faces, the President said South Africa “needs a capable and effective state”.

“Our greatest weaknesses are in state-owned enterprises and local government. Many of our SOEs are struggling with significant debt, under-investment in infrastructure, the effects of state capture and a shortage of skills.

“We will implement the recommendation of the Presidential SOE Council to establish a state-owned holding company as part of a centralised shareholder model that will ensure effective oversight of SOEs,” he said.

The poor performance of many local governments remains an area of concern, said the President.

Of the 257 municipalities, 163 are dysfunctional or in distress due to poor governance. Others are ineffective and sometimes have corrupt financial and administrative management and render poor service delivery.

In this regard, he said government was implementing a number of interventions to address failures at local government level and improve basic service delivery.

These include enhancing the capacity of public representatives and officials, maintaining and upgrading local infrastructure, and invoking the powers of national government to intervene where municipalities fail to meet their responsibilities.

He said a professional public service, staffed by skilled, committed and ethical people was critical to an effective state and ending corruption, patronage and wastage.

“In response to the State Capture Commission and in line with the framework for the professionalisation of the public service, integrity assessments will become a mandatory requirement for recruitment to the public service and entry exams will be introduced.

“We are amending legislation and strengthening the role of the Public Service Commission to ensure that qualified people are appointed to senior management positions and to move towards creating a single, harmonised public service,” he said. –