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Taxpayers Lose Billions: The Shocking Cost of Government Waste in South Africa
As South Africans face higher living costs and potential tax hikes, national government departments have recorded nearly R8 billion in unauthorised, irregular, and wasteful expenditure in the 2023/24 financial year alone.
Over half of this staggering amount came from the Department of Defence, making it the biggest financial mismanager.
This revelation comes from Finance Minister Enoch Godongwana, who detailed the extent of government waste in response to a parliamentary question from MK Party MP Nhlanhla Gcwabaza.
The Breakdown: How R8 Billion Went to Waste
According to Godongwana, national departments recorded:
- R4.93 billion in unauthorised expenditure (spending beyond the approved budget or for unapproved purposes)
- R2.85 billion in irregular expenditure (failure to follow procurement regulations or legal requirements)
- R160.5 million in fruitless and wasteful expenditure (spending that could have been avoided with better financial management)
Despite ongoing budget concerns, these financial losses highlight serious inefficiencies and mismanagement in key government departments.
Who Are the Biggest Offenders?
Unauthorised Expenditure
The five departments responsible for over 99% of unauthorised spending are:
- Department of Defence – R3.37 billion (68.5% of total)
- Department of Correctional Services – R614.3 million
- Department of International Relations and Cooperation – R435.6 million
- Department of Justice and Constitutional Development – R291.8 million
- Statistics South Africa – R128.3 million
Irregular Expenditure
The top five offenders for irregular spending, accounting for over 87% of the total, are:
- Department of Defence – R977.5 million (34% of total)
- Department of Home Affairs – R578 million
- Department of Police – R275.3 million
- Department of Basic Education – R210.7 million
- Department of International Relations and Cooperation – R207.5 million
Fruitless and Wasteful Expenditure
Although smaller in value, wasteful expenditure still reached R160.5 million, with these departments as the biggest culprits:
- Department of Basic Education – R41.4 million (25.8% of total)
- Department of Defence – R50.9 million
- Department of Public Works and Infrastructure – R56.8 million
- Department of Home Affairs – R890,000
- Department of Cooperative Governance – R110,000
Overall, the Department of Defence is the worst offender across all three categories, with a staggering R4.4 billion in financial mismanagement.
What Happens Next?
The government has pledged to address financial mismanagement, with Godongwana stating that “accounting officers and authorities are empowered to take disciplinary action against officials responsible for unauthorized, irregular, and wasteful expenditure.”
The Public Finance Management Act (PFMA) requires government departments to take disciplinary action against those responsible, with reports on such actions included in annual reports. However, enforcement has historically been weak, raising concerns about whether accountability will follow.
Additionally, National Treasury Instruction 4 of 2022/2023 enforces strict compliance and reporting requirements, mandating investigations into financial mismanagement.
Could Taxpayers Be Forced to Pay the Price?
With South Africa facing a budget deficit, government spending is under scrutiny. Some experts warn that the lack of fiscal discipline could lead to tax hikes, including a possible VAT increase to 17%—a move that would burden ordinary South Africans.
While certain departments, like Higher Education and Science & Innovation, reported zero waste, the billions lost elsewhere continue to highlight the inefficiencies plaguing public finances.
As the country approaches the 2025 Budget announcement, the question remains: will there be real accountability for wasteful spending, or will taxpayers once again be left footing the bill?
Stay updated as we track how the government handles this financial crisis.
Financial mismanagement in government continues to be a major issue, with billions lost in unauthorised, irregular, and wasteful expenditure. As South Africa grapples with economic challenges, citizens must demand greater accountability from those in power.
The upcoming budget decisions will determine whether the government can rein in its spending or if taxpayers will once again be forced to shoulder the burden.
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