R14 billion in losses – but don’t call it state collapse, says Cabinet

 ·21 Nov 2023

While acknowledging that challenges still remain, Cabinet says the outcomes of the 2022/23 national and provincial government audits “dispel” claims that state capacity is in total collapse.

“Cabinet was briefed by the Auditor-General of South Africa (AGSA) on the outcomes of the 2022/23 financial year national and provincial audits.

“The AGSA pointed out an encouraging trend of continuous improved performance, which indicates overall improvement in accountability, transparency, adequacy and effectiveness of controls.

“The departments and institutions that have achieved unqualified audits with no findings (clean audits) have increased from 94 during the 2018/2019 to 147 during 2022/2023, reporting a year-on-year improvement,” said Minister in The Presidency, Khumbudzo Ntshavheni, at a Post-Cabinet media briefing on Monday.

The AG’s report also showed that the departments and institutions that have achieved unqualified audits with findings are 162, which represents 39% of the audited institutions.

The AG noted that the institutions and departments with disclaimed findings have decreased from 25 during the 2018/2019 reporting period to five during the 2022/2023 reporting period, which represents only 1% of audited institutions.

“Although the Auditor-General reports an estimated R14 billion in financial losses, measures to address material irregularities also show an improvement. 

“Although challenges still remain, the outcomes of the 2022/23 national and provincial government audits dispel claims that State capacity is in total collapse, with independent and objective assessment by institutions such as the AGSA indicating a very strong and continuous improvement trajectory,” Ntshavheni said.

State collapse

Ntshavheni’s comments follow the release of a two-year study by developmental experts and researchers at Harvard, which pointed to failed ANC policies and poor governance at the heart of state capacity collapse in South Africa.

The researchers found that South Africa has failed to create enough jobs to grow the economy and now faces extreme levels of unemployment and inequality.

The ANC government’s policies have gridlocked the economy and crippled decision-making in addressing failures in electricity and infrastructure, while the party’s cadre deployment has cut out desperately-needed skills while bolstering political patronage and corruption, the study found.

“After 15 years, attempts to stimulate the economy through fiscal policy and to address exclusion through social grants have failed to achieve their goals.

“Instead, they have sacrificed the country’s investment grade, increasing the cost of capital to the whole economy, with little social progress to show for it,” the researchers said.

“Three decades after the end of apartheid, the economy is defined by stagnation and exclusion, and current strategies are not achieving inclusion and empowerment in practice.”

With SANews

Read: South Africa’s broken state

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