National Treasury

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• National Treasury
• 2008/09 Annual Report Presentation to Parliament

Lesetja Kganyago, Director General 21 October
2009
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Aim and strategic focus areas
National Treasury draws its mandate from Chapter
2 of the Public Finance Management Act based on
Chapter 13 of the Constitution. It is responsible
for coordinating macro-economic policy. Its
objectives are to

• Advance economic growth and income redistribution
• Prepare a sound and sustainable national budget
  and equitable division of resources
• Strive to equitably and efficiently raise fiscal
  revenue, while enhancing efficiency and
  competitiveness of the South African economy
• Ensure sound management of governments financial
  assets and liabilities
• Promote transparency and enforce effective
  financial management
• Contribute to employment creation

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Operational and Policy Responsibilities

• Economic Policy and International Financial
  Relations
• - Economic analysis and forecasting
• - Tax and Financial Sector Policy
• - International and Regional Economic Policy
• Public Finance and Budget Management
• - Budget Office
• - Public Finance
• - Intergovernmental Relations
• Assets and Liability Management
• Financial Management Systems
• Financial Accounting and Reporting

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Programme 2Public Finance and Budget Management

• In 2008 South Africas budget documents were
  rated second highest in the world in terms of
  transparency by the Open Budget Initiative
• The feasibilities of capital bids were assessed
• The 2009 ENE included data on performance
  information and also tracked development
  assistance programmes for each national
  department
• A revised Public Finance Management Bill was
  submitted to Cabinet in May 2008, with
  substantial changes to the governance of public
  entities
• Budget submissions, policy proposals and
  expenditure plans of national departments and
  state enterprises were evaluated
• Spending and service delivery trends were
  monitored
• StatsSA was provided with assistance in budgeting
  and planning for household surveys and the 2011
  national census

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Programme 2 (cont)Public Finance and Budget
Management

• Provided advice and support to the Department of
  Health on projects that amounted to a further R19
  billion over the MTEF
• Technical assistance was provided to 82 projects
• Offered project management advice to departments
  and host cities responsible for 2010, in addition
  to overseeing cost control and contract
  management
• The Neighbourhood Development Programme offered
  86 grants to 51 municipalities, with a value of
  R8.75 billion
• 32 full-time technical advisors were deployed to
  all provinces to assist with infrastructure
  planning and implementation

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Programme 2 (cont)Public Finance and Budget
Management

• Developed an internet-based training programme in
  budget formulation for managers in the public
  service
• Coordinated MFMA implementation in all
  municipalities and provided support to 25
  municipalities and all provincial treasuries
• Introduced new conditional grants to provinces
  (Ilima/letsema, overload control grant and Sani
  Pass grant)
• Reviewed the local government fiscal framework to
  provide greater financial support to poor and
  rural municipalities
• Deployed 503 financial management interns to
  municipalities as part of building capacity in
  municipalities

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Programme 3Asset and Liability Management

• Moodys Investors Service affirmed South Africas
  rating outlook as positive.
• Three other rating agencies revised their ratings
  outlook from stable to negative
• Financed the revised gross borrowing requirement
  of R50.9 billion
• Completed the financial review of the PBMR
  project
• Submitted the DFI review report to Cabinet in
  2008
• Implementation of the new foreign debt module
  was delayed due to interface incompatibilities
  with other parties
• The domestic debt composition was 29.7 non-fixed
  rate and 70.3 fixed-rate debt.
• Conducted domestic and foreign non-deal road
  shows with investors
• Foreign and domestic debt was split 15.5 and
  84.5 respectively

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Programme 4Financial Management and Systems

• Established a grievance mechanism to deal with
  disputes and complaints arising from tender
  processes
• Facilitated 31 transversal contracts
• New SCM framework delayed due to postponement in
  considering the revised PFMA by Parliament
• Alignment of preferential procurement with the
  aims of the BBBEE Act and related strategy not
  completed due to delays in considering the
  revised PFMA
• Rolled out strategic sourcing principles to 30
  of national departments as planned
• Further rolled out the IMFS
• 98 availability of financial management systems
  during working hours

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Programme 5Financial Accounting and Reporting

• Produced consolidated financial statements
• Developed and refined accounting policies to
  comply with the standards issued by the ASB
• Developed a template for municipalities for their
  annual financial statements
• Developed and published a GRAP booklet
• 17 students participated in the training outside
  public practice (TOPP) programme
• Developed a capacity-building model for finance
  personnel in national and provincial departments

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Programme 6Econ. Policy and Int. Financial
Relations

• Developed a principal components model to assist
  in forecasting short(er) term GDP growth outcomes
• Improved policy focus for the MTBPS
• Produced economic assessments of policy proposals
• Analysed the economic impact of electricity
  tariff increases
• Presented to Cabinet on the causes of food price
  increases and proposed policy responses
• Improvements to estimates of various tax
  elasticities
• Published various pieces of legislation (Taxation
  and Revenue Laws Amendment Bill, Minerals and
  Petroleum Resources Royalty Bill, etc)

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Programme 6 (cont)Econ. Policy and Int.
Financial Relations

• Published recommendations of the International
  Growth and Advisory Panel
• Contributed to the G20 resolutions (with a focus
  on global financial regulations and financial
  stability)
• Participated in G20 to promote governance reforms
  in the IMF/World Bank
• Established the Cooperative Banks Development
  Agency and appointed an MD
• Published the micro-insurance discussion paper
• Proposed a review of the SACU formula and
  developed a database of SACU payments
• Participated and contributed to meetings of the
  AfDB, SADC, UNECA and CABRI

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Programme 7Provincial and Local Government
Transfers

• R7.2 billion was transferred to all provinces
  through the infrastructure grant to provinces
  (portions of the third and fourth instalments
  were delayed due to under-expenditure and
  non-compliance)
• The local government financial management grant
  was transferred to 283 municipalities
• Introduced the asset transfer, budget and
  reporting regulations for municipalities
• With regard to capacity building - 186
  municipalities had 2 interns and 58
  municipalities had 1 intern each. Only 39
  municipalities had no interns
• All municipalities received support on the
  implementation of the MFMA
• The local government restructuring grant reached
  financial close on 31 March 2008, having achieved
  its intended objectives

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Programme 8Civil and Military Pensions,
Contributions to Funds and Other Benefits

• Governments contribution to pensions and other
  benefits on behalf of retired civil servants
  increased from R2.2 billion in 2007/08 to R2.3
  billion in 2008/09
• A total of 10 433 Injury on Duty beneficiaries
  were paid on a monthly basis
• Re-designed the special pensions application
  forms
• Launch of the special pensions awareness campaign
  delayed due to protracted internal processes

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Programme 9Fiscal Transfers

• Transferred over R20 billion to other
  institutions, including the R10 billion loan to
  Eskom to assist with sustainable development of
  infrastructure for electricity in South Africa
• Other transfers include
• SARS
• FFC
• FIC
• DBSA Siyenza Manje)
• AfDB

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Programme 1Administration

• Implemented cost-cutting measures (flights,
  accommodation and catering)
• Enhanced the graduate development programme.
  Acceptance rates reached 81 per cent for general
  internship applicants, and 70 per cent for
  training outside public practice (TOPP)
  applicants, coaching and mentoring programmes for
  senior managers.
• Developed customised Web publishing solutions
• Provided comprehensive legal support to the
  department and the ministry and oversaw the
  passing of legislation through parliament
• Provided a reliable communication, marketing and
  media service to the department and ministry
• Ensured a safe working environment and optimal
  availability of facilities
• Developed project management capacity

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THANK YOU