PRETORIA, Despite the South African economy facing challenges, capital expenditure (capex) at public sector institutions has been growing steadily, says Statistician General Pali Lehohla.
“In terms of what the vision for South Africa is, we have the National Development Plan (NDP) and what we need to do is test our spending against the goals of the NDP. While the economy has not been doing terribly well and is in recession, capex has been increasing steadily over a period of time,” Lehohla told a media briefing here Wednesday.
Statistics South Africa (Stats SA) released Wednesday the findings of Capital Expenditure by the Public Sector 2016 report which showed that total capital expenditure by public sector institutions increased by 18 billion Rand (one US dollar = about 12.9 Rand) from 265 billion Rand in 2015 to 284 billion Rand in 2016.
The report showed that capex by public sector institutions had increased to 1.2 trillion Rand in the last five years. Capital expenditure refers to any expenditure incurred in or incidental to the acquisition or improvement of land, buildings, engineering structures and machinery and equipment. The expenditure normally confers a lasting benefit and results in the acquisition of or extends the life period of a fixed asset.
The 2016 report showed that the largest share of the 284 billion Rand in capex expended by public sector institutions was spent by public corporations at 138 billion Rand (or 49 per cent). According to the report, power utility Eskom and logistics group Transnet were the major contributors to public corporations’ capex in 2015 at 73 billion Rand and 34 billion Rand, respectively.
Eskom spent 70 billion Rand on the power generation projects at Kusile, Medupi and Ingula power stations, while Transnet spent 11.1 billion Rand on the expansion of infrastructure and equipment. Another 18.5 billion Rand in capex were spent on maintaining capacity in the rail and ports divisions.
The second largest share in capex expended by public institutions was by municipalities at 66 billion Rand (or 23 per cent). Municipal capex when coming to new construction works was at 57.256 billion Rand.
Municipalities were followed by provincial governments at 36 billion Rand, national government at 18 billion Rand, and extra-budgetary accounts at 17 billion Rand. Higher education institutions had the smallest share of the total capex by public institutions at 7.0 billion Rand (or 2.0 per cent).
Source: NAM NEWS NETWORK