SA state capex grows to R200bn

1 August 2013

The state injected R202-billion in capital spending into the South African economy in 2012, Statistician-General Pali Lehohla told journalists in Pretoria on Wednesday.

Lehohla was speaking at the release of Statistics South Africa’s public sector capital expenditure survey for 2012.

According to the survey, total capital expenditure by the country’s public institutions increased by R21-billion, from R181-billion in 2011 to R202-billion in 2012.

Capital expenditure refers to any expenditure on acquiring or improving land, buildings, engineering structures, and machinery and equipment.

According to the report, the bulk of state capital spending in 2012 went into new construction works, with plant, machinery and equipment lagging behind. At least R137-billion was spent on new construction works, while R38-billion was spent on plant, machinery and equipment.

“You will see that expenditure on machinery and the like is fairly low, but expenditure on actual work is fairly high consistently across government and it continues to rise over time,” Lehohla said.

“Service delivery is influenced by long-term infrastructure, but municipalities are not investing adequately in equipment and machinery,” he added. “Employment-related costs in municipalities continue to grow. But there is no spending on equipment and machinery. This raises the question: who is doing the work?”

The report covers capital expenditure by national, provincial and local government departments, state-owned enterprises, higher education institutions, and extra budgetary accounts and funds (such as the SA Revenue Service).

State-owned enterprises spent the most, according to the report, spending R79-billion on new construction works in 2012, up from R30-billion in 2008.