Provinces must do more than just pay lip service to value for money – IRR

At least five provincial legislatures are sitting for their budget speeches today, with the rest following during the week. As this key governance process unfolds, the Institute of Race Relations (IRR) will continue its engagements with each of the provinces to ensure that budgets give effect to the value-for-money commitments and assurances to residents given by provincial MECs.

Provincial budgets are a definitive measure of the effectiveness and efficiency of local governance. What provincial governments spend money on reveals what their priorities are. Are their priorities to ensure that every cent is spent on upgrading infrastructure and performing maintenance, reinvesting in service delivery, and procuring goods and services that maximise delivering quality to residents? Or are provincial governments simply committed to perpetuating the status quo of senselessly spending on BEE premiums, which undermine value for money and ultimately contribute to the denial of services to residents?

Strategic Engagements Manager at the IRR, Makone Maja, has posed these questions to the finance MECs of each province as they head into delivering their budget speeches.

Says Maja: “Many of South Africa’s local governments are in decline owing to poor management by provincial governments, the lack of accountability, and an unwillingness to reform. The provincial budget speeches of 2025 tacitly acknowledge these facts and identify implementing value for money as the key to ending much of the rot in provincial government.”

The Gauteng MEC for Finance and Economic Development, Lebogang Maile, emphasised value for money as being integral to improving infrastructure development and to responsibly steering the finances of the province, particularly where procurement was concerned.

The MEC for Finance in Limpopo, Kgabo Mahoai, came to the same conclusion, stating that promoting value for money was essential to “proactive rather than reactive” infrastructure delivery and to “strengthening governance”.

Northern Cape residents were similarly reassured by their finance MEC, Venus Blennies-Magage, who said the Northern Cape government would “continue to identify, examine, and address inefficiencies in the system to improve value for money and allocative efficiencies”.

Maja notes: “More MECs did the same – alluding either implicitly or explicitly to implementing value for money as a critical step to improving local government performance. Which is why we are equipping them with the IRR’s Value for Money Bill to help them realise their stated value-for-money goal by dedicating every single cent to improving their residents’ experience of service delivery.”

The Value for Money Bill targets the procurement budget as an integral conduit of service delivery. Procurement spending has long been used, via Black Economic Empowerment (BEE) premiums, as a trough to enrich the few politically connected elite among us rather than facilitating and accelerating the provision of services to all. BEE premiums undermine value for money in procurement, resulting in poor service delivery outcomes, the rapid decline of infrastructure in the provinces, and corruption. It is in the provinces’ best interest to implement mechanisms that require their procurement budgets to maximise value for money to reverse these trends and ensure that taxpayers receive quality goods and services.

Maja concludes: “Provincial governments must choose: they can either prioritise their residents’ interests and broaden access to services which would greatly benefit all people, or they can continue to disproportionately enrich a narrow group of tenderpreneurs. The last 20 years of attempting to do both have come at great cost to the former and given undue benefit to the latter. This must stop.”

Read – and support – the Value For Money Bill here: https://irr.org.za/whatsacanbe/value-for-money

Media contact: Makone Maja, IRR Strategic Engagements Manager Tel: 079 418 6676 Email: makone@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za