Earlier this year, Finance Minister Tito Mboweni announced that from 1 July, a zero-based budgeting (ZBB) approach would be applied to all government departments.
If implemented, this would force all government departments to use a method of budgeting in which expenses need to be justified for each new budgeting period. ZBB means that each government department’s budget starts from scratch, and thus questions every element incorporated into the budget. ZBB, which was developed in the 1970s, was first used by consumer goods companies, but is now applied across most industries. So far, no government agency has implemented ZBB for an extended period of time, as budget managers find it too laborious to go through the process of justifying every programme and service on a yearly basis. However, it is exactly for this reason that I believe ZBB should be implemented in state departments.
For years, I have made it clear that the Department of Agriculture, Land Reform and Rural Development (agriculture department) is focusing on “spending the budget” with no clear plan of action on how this expenditure will benefit the growth of the agriculture sector and support transformation through land reform.
Auditor-General Kimi Makwetu recently reported that irregular government expenditure for the 2018/2019 financial year rose to R32 billion, which was an increase of R7 billion from the previous financial year.
While the fruitless and wasteful expenditure in the agriculture department does not frequently grab headlines, it will become clearer once expenditure items are scrutinised.
INFLATED PRICING
I have seen the department paying R1,4 million for a kilometre of normal fencing, while the average rate is R16 000.
This story is from the October 23, 2020 edition of Farmer's Weekly.
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This story is from the October 23, 2020 edition of Farmer's Weekly.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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