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

Country Case Study: South Africa 513
Main budget
(expenditure financed
from the National Revenue
Fund)
Consolidated
national budget
(main budget + social security funds +
Reconstruction and Development Programme donor funds)
Consolidated national and provincial accounts
(consolidated national budget + provincial accounts)
Consolidated general government
(consolidated national and provincial accounts + extrabudgetary
institutions and local government accounts)
Source: National Treasury of South Africa 2006a.
FIGURE 15.2
Structure of Government Accounts
The annual budget documentation also includes an assessment of the
wider public finances, including the public sector borrowing requirement
and a discussion of contingent liabilities. This information provides
transparency regarding all government’s financial operations and its role
in the economy.
In South Africa, implementation of the MTEF has not been hindered by
overestimation of revenue, as is often the case. Three factors contribute to
this result: the credibility of the macroeconomic assumptions, which are
published in the prebudget statement and debated in public forums; the tax
administration reforms, which buoyed revenue collection in the first few
years, enabling the Treasury to provide predictability of funding to spending
departments; and the use of the contingency reserve to absorb macroeconomic
uncertainty.
Use of budget ceilings and forward (baseline) projections
All bids competing for the same envelope of available funds are considered
in the budget process together within an overall hard budget constraint,
forcing hard choices. This process may result in certain programs receiving
additional funding, while others will be required to accelerate delivery
within baseline budgets. In certain cases, the budget allocation process
may result in programs having to release funding that can be used for
new priorities.