From 1994, a new decentralised budget system was introduced in South Africa. What are the key elements that have made resource allocation more democratic? How has civil society been given a greater role in formulating budgets? This paper, published by AWEPA (European Parliamentarians for Africa), analyses the process with relation to the province of Gauteng.
South African provinces no longer serve simply as spending agencies for central government. They have greater autonomy to tax and spend, and can develop and process their own policy priorities in certain key areas. This prioritisation is translated into resource allocations that support provincial policy objectives in a multi-year framework. National and local governments have the responsibility of developing budgets that balance social and fiscal objectives with the economic environment. Provincial finance committees and other portfolio committees monitor the budget process. Civil society can engage with the executive before budgets are tabled and participate in committee meetings. These reforms have resulted in a culture of sound policies, legislation and planning within a transparent and accountable environment.
Fundamental to the new system are the Constitution, which came into effect in 1997, the introduction of enabling legislation and the roles of the legislature and finance committees in providing oversight. Key reforms include:
- The introduction of multi-year budgeting, which works on a three-year spending framework linking national and provincial governments. It has improved planning and effectiveness.
- New legislation allowing central and provincial governments to scrutinise the budget process and to apply sanctions for fiscal misconduct.
- Oversight of the budget’s guiding principles by the finance committees. This aims to ensure that the global allocation of resources complies with provinces’ identified priorities.
- Examination of the detail of the budget by portfolio committees, which look at particular programmes and their impact.
- The development of instruments, procedures and mechanisms to support the new system, including a unique range and combination of public sector institutions.
- Ensuring that the reporting cycle for oversight by the legislature plays an active role, allowing priorities to change and new demands to emerge.
Budgets can only be effective instruments of policy implementation and transformation when they incorporate public participation. Governments must engage with citizens in the early stages of budget formation so that allocations reflect and respond to their concerns. In Gauteng, while there is still progress to be made, this has been achieved by:
- Regular engagement between the executive, legislature and civil society. Meetings should include youth, women and the disabled, as well as different business sectors.
- The examination of interim annual reports by civil society members, so that their feedback can be incorporated into the new budget before it is tabled.
- Creating a range of opportunities for engagement, including committee meetings, hearings, forums, seminars, and project and community visits.
- The Finance Committee inviting civil society representatives to make regular contributions on the impact of allocations.
- Establishing a Public Participation and Petitions Office to give impetus to the principle of participatory democracy.
