Reserves tapped to help cover shortfall

As the Eastern Cape’s equitable share allocation continues to shrink, the provincial government has dipped into its reserves to cover half of the R19.8bn shortfall.

Finance MEC Oscar Mabuyane said R9.2bn had been added to the budget to make up almost half of the shortfall.

“This is to ease the impact of the budget shortfall during this fifth term of government.”

Asked after his budget speech why the reserve funding was being used now, Mabuyane said the government was trying to close the gap with the ever-declining equitable share allocation.

“Over the past year, we were able to make some savings that we were able to keep for days like these,” he said.

He said the reserve money was usually kept for disasters.

“We are a disaster-prone province whether it’s summer or winter.

“If it is not fire in Tsitsikamma it is snow in the northwestern part of the province.

“But it is money that we’ve had as a province that we’ve kept over a period of time.”

Mabuyane said the reserve money would be used for development initiatives, including small town revitalisation.

“We’re putting this money in the developmental space to create more jobs and also revenue collection initiatives such as tourism,” he said.