Public Sector Governance and Accountability Series: Budgeting and ...

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Country Case Study:
South Africa
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T
he 1994 transition to a democratic state brought many challenges
for managing public finances in South Africa. Not only
did the new constitutional dispensation determine a changed structure
and distribution of power in the state, with implications for the
way public funds were allocated and used, but the new government
also had a critical political commitment to improving the coverage
and quality of public service delivery to redress the racially based
distortions of the past. The transition to a new system of budget
management occurred, therefore, not in a context of policy stability
but simultaneously with a major overhaul of government policies.
In practice, the results have been uneven.
Although on the surface the government succeeded in introducing
a medium-term expenditure framework (MTEF) approach
to budget management, overhauled the legal framework for financial
management, reformed the classification system, and put in
place a functioning system of intergovernmental transfers, these
changes have not consistently resulted in improved service delivery.
Many gaps remain between public policy commitments and functional
implementation.
This chapter describes the reform approach and milestones, noting
where reforms fell short of their intent and where gaps remain.
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