ANC-governed departments and SOEs incurred R40 billion a year in fruitless, wasteful, irregular and unauthorised expenditure

9 November 2023

A comprehensive analysis conducted by the DA has uncovered that Ministerial Departments, State-Owned Enterprises, and various entities under the ANC administration have collectively incurred a staggering R40 billion in fruitless and wasteful, irregular, and unauthorised expenditures in the 2022/23 financial year alone.

This alarming figure serves as a stark reminder that the ANC's nearly three decades of governance is characterised by an absence of accountability, transparency, and a lack of commitment to preventing wasteful expenditure from taxpayer's funds.

Fruitless and wasteful expenditure is expenditure that was made in vain and would have been avoided had reasonable care been exercised, whilst irregular expenditure is that which was incurred that is in contravention of or that is not in accordance with a requirement of any applicable legislation. Unauthorised expenditure includes overspending of a budget vote or a main division, or expenditure which is not in accordance with the purpose of a vote.

The analysis scrutinised all expenditure that was spent during the year of assessment by referring to each annual report that was tabled in Parliament, as is required by the Public Finance Management Act (PFMA). In other words, this figure does not include historical figures from prior years, nor does it include expenditure incurred in a prior year but only discovered in 2022/23.

Based on historical trends, this figure is likely to increase substantially in the next financial year when figures are only discovered at a later stage. Moreover, the figures presented do not account for amounts recovered as the expenditure has already been incurred, and individuals or entities have profited from it.

What is worse, is that this figure does not include the various Departments and entities which have failed to even table their annual reports in Parliament – an omission which is in contravention with, and a potential criminal offence in terms of the PFMA.

In total, the following Departments have not yet tabled their reports. These Departments include:

- Agriculture, Land Reform and Rural Development

- Public Works and Infrastructure

- Transport

- State Security

Further, a total of 69 SOEs and other entities have failed to table their annual reports which means that the R40 billion is a very conservative figure.

In a time where living costs are escalating at breakneck pace and vulnerable South Africans are battling to make ends meet, the ANC government’s silence and refusal to rebut a further tax hike to the already dwindling tax base in the next financial year is shameful.

It is utterly unacceptable that a government that has consistently failed to curb unlawful and wasteful spending now expects an already strained tax base to bear the weight of its incompetence. The DA demands that the Auditor General (AG) must act against the lack of accountability exhibited by both the accounting officers of these entities and the Ministers overseeing them. This must be accompanied by stringent consequence management measures to ensure that such negligence does not go unpunished.

In addition, the DA calls upon the AG to initiate criminal investigations against accounting officers who have allowed blatant wasteful expenditure to occur under their watch, in accordance with the PFMA.

Issued by Dion George, DA Shadow Minister of Finance, 9 November 2023