R13 billion social grant fraud uncovered in South Africa
The government has identified R38.1 billion in savings over the medium term as it works to improve the quality of spending and direct funds towards efficient and effective programmes.
The savings form part of a shift away from incremental, input-driven budgeting towards strategic decisions based on outcomes, affordability and value for money.
Finance Minister Enoch Godongwana said the government is phasing out programmes that are no longer fit for purpose.
“We are also restructuring underperforming and inefficient programmes, and reducing administrative inefficiencies and fraud in programmes,” the Minister said on Wednesday while delivering the Medium-Term Budget Policy Statement (MTBPS) in Parliament.
In addition to the R12 billion identified in the 2026 Budget, a further R38.1 billion has been identified over the 2027 Medium-Term Expenditure Framework (MTEF) period:
- R11.7 billion from low-priority programmes and measures to reduce duplication and administrative inefficiencies in national departments;
- R13 billion from reducing fraud in social grants;
- R7.8 billion from the human settlements development grant, where programme inefficiencies and rent seeking have resulted in less spending on building houses; and
- R5.5 billion from surpluses in public entities.
Godongwana said efficiencies and savings could also be found in provincial budgets.
For example, implementing more effective remuneration policies for healthcare workers could enable provinces to employ more health professionals.
The National Treasury’s MTBPS document emphasised that improving the quality of spending by allocating funds to efficient and effective programmes is a fundamental reform of the budget process.
“Targeted and responsible savings are identified by assessing programmes on a common basis and asking key questions. Are programmes legally required? Are they aligned with policy priorities?
“Do they efficiently deliver measurable outputs and outcomes? Is there persistent underspending or poor performance? Could the same objective be achieved at lower cost or through a better institutional arrangement?”
“Government will continue to reduce leakage and fraud by improving administration and verification, redesigning programmes that fail to meet their objectives, redirecting funds from low priority, inefficient or duplicated activities and addressing accumulated cash surpluses in public entities,” National Treasury explained.
These savings have been reprioritised and redirected across the fiscal framework.
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