In his 2022 Medium Term Budget Policy Statement, the Minister of Finance, Honourable Enoch Godongwana made the following policy pronouncement on the Gauteng Freeway Improvement Project popularly known as E-Toll: “to resolve the funding impasse the Gauteng provincial government has agreed to contribute 30 per cent to settling SANRAL’s debt and interest obligations, while national government covers 70 per cent”.
In the Budget Speech in March this year, Gauteng Provincial Treasury announced that as part of the province’s arrangements to service the debt, a provision for honouring this commitment has been pencilled into the 2024 fiscal framework.
This was followed by the signing of the Memorandum of Agreement between the Gauteng Provincial Government and the National Treasury for the province to honour the debt and the maintenance portion for the E-Toll debt. The obligation to service this debt has necessitated the implementation of a host of reforms and measures to maintain a healthy fiscal environment that will be both sustainable and manageable in the long term.
Today, the Gauteng Provincial Government is starting the process to service the historical debt of R12.9 billion in five equal annual instalments at government 5-year interest rate. The first instalment that we are paying today amounts to R3.8 billion, consisting of R3.2 billion (historical debt) and the maintenance portion of R546 million. The implications of the E-Toll debt require the provincial government to manage finances in a prudent manner whilst carefully balancing the service delivery needs of the citizens.
The fiscal trajectory of Gauteng Provincial Government must be addressed through a combination of active debt management strategies and spending restraint that improves the primary fiscal balance and elimination of wastage and leakages in the system. The province will need to allocate a substantial amount of funds each year for the next five years to meet the repayment obligations.
Therefore, to address these fiscal challenges, Gauteng Provincial Treasury is working with revenue-collecting departments to identify alternative sources of revenue. This aims to ensure that frontline services remain uncompromised, prioritising programmes that foster growth, safeguarding essential social services for vulnerable members of society, maintaining the provision of basic services in the province.
Gauteng Provincial Treasury has a five-year budget approach that will facilitate provincial delivery based on the Medium-Term Development Plan for the 7th Administration. The five-