Gordhan issues stern warning to govt depts

Government departments cannot spend money as if it is “business as usual”, the Finance Minister says.

Finance Minister Pravin Gordhan Pravin Gordhan. Picture: GCIS.

CAPE TOWN - Government departments cannot spend money as if it is "business as usual" in South Africa, Finance Minister Pravin Gordhan said Thursday.

He made the comments during his medium-term budget speech in Parliament, Cape Town.

Gordhan conceded that the country is facing a number of problems, among them the chaos in the mining sector.

More than R10 billion has been lost due to a series of wage strikes, many of which were unprotected.

Gordhan emphasised that departments must tighten their belts.

"In government, we are confronting difficulties. We assure our people that we will repair dysfunctional municipalities and we will try harder to connect book suppliers with schools. We will work with business and labour to provide decent living conditions in communities."

Gordhan appeared to be confronting the recent problems around strikes and the country's increasing debt.

The minister also revised the country's growth forecast down.

He said the economy will grow by around 2.5 percent this year, which is down from 3 percent in 2011.

Export volumes contracted at an annual rate of 6 percent, while import volumes are now almost 4 percent above the levels they were before the economic crisis, the minister said.

Gordhan warned this is contributing to the widening current account deficit.