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How South Africa’s Provinces Fell Short on Spending R923 Million in Public Funds

Published

3 weeks ago

August 14, 2025

Chiraag

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The money was there. The action was not.

In a country where hospitals are understaffed, housing projects are delayed, and learners go without meals or textbooks, the revelation that South Africa’s provinces failed to spend R923 million in public funds is hard to digest.

The funds, allocated through conditional grants for critical services like housing, health, and education, were returned to the national purse after provinces failed to use them during the 2023–24 financial year.

The breakdown of the surrender, made public by Finance Minister Enoch Godongwana in response to a parliamentary question, reveals not just administrative failure but a deeper story of capacity gaps, unfilled posts, and missed opportunities in almost every corner of the country.

Gauteng returns the most; KZN the only one with clean hands

At the top of the refund list is Gauteng, South Africa’s economic engine, which surrendered R465.4 million, more than half the national total. In sharp contrast, KwaZulu-Natal was the only province that managed to spend all of its allocated conditional grants.

The Western Cape also returned a significant amount: R224.4 million. Limpopo surrendered R68.6 million, and North West came close behind at R66.6 million. Other provinces included the Eastern Cape (R62.7 million), the Free State (R19.3 million), Mpumalanga (R10.5 million), and the Northern Cape, which returned the lowest amount at R5.6 million.

Housing, health, education are all in the red

The sector that failed the most? Human settlements handed back R409.1 million, nearly half of the total unspent funds.

According to Godongwana, this came down to a shortage of personnel. Key roles such as planners, engineers, and project managers went unfilled, stalling housing developments across the country.

The health sector surrendered R193.3 million, primarily due to procurement delays. Much of the sector’s technology is imported, and delays in sourcing and delivery, especially for the National Tertiary Services Grant, meant spending ground to a halt.

Roads and transport returned R155.9 million, hampered by legal action and underperforming contractors that disrupted project timelines. Education surrendered R92.3 million, in part due to delays in procuring laptops and hiring staff for the School Nutrition Programme.

Not just admin errors, these have real-world consequences

The money left unspent represents real services not delivered. Families waiting for housing. Patients in understaffed hospitals. Pupils are going hungry because nutritional programmes were not implemented in time.

In the public works sector, R15.5 million went unused due to delays in finalising EPWP (Expanded Public Works Programme) worker contracts.

The agriculture sector, which returned R24.4 million, faced a different challenge: community unrest halted training programmes and delayed project rollouts.

Even basic transport functions were affected. A chunk of the transport surrender came from delays in finalising bus subsidy contracts, which were only approved well into the second quarter.

Treasury responds, but is it enough?

Minister Godongwana said that the National Treasury has ongoing engagements with provinces to address performance issues. Officials attend sectoral meetings, provide guidance, and flag concerns with both national and provincial departments.

But the real question is: will this hands-on approach lead to hands-on results?

Public frustration is building. With so many service delivery failures reported around the country, underspending on this scale suggests that money is not the only problem. The capacity to use it and the urgency to meet people’s needs are just as critical.