Government still needs to raise E1.5 billion during the current financial year as it seeks to ease cash-flow pressure and fund capital projects across the country.
Minister of Finance Neal Rijkenberg said government’s cash flow remained under strain, although efforts were underway to secure budget support and other funding.
He said money was expected to start coming in over the next few months, with some inflows possibly beginning this month.
Rijkenberg was speaking during his latest Finance in Focus update, where he explained the reasons behind government’s cash flow challenges and plans to raise more money. The minister said government was still involved in a number of discussions to secure budget support.
However, he said the process of raising budget support was not always quick, as it involved a number of processes before the money could be released.
“Cash flow is still under a bit of strain. But we are working on that. There are many different discussions taking place,” said Rijkenberg.
He said some of the pressure on government finances had resulted from decisions to fund major projects and other expenditure that had not originally been provided for in the budget.
Among the items he mentioned were the salary review and the completion of the International Convention Centre (ICC). Rijkenberg said government had decided to proceed with these commitments even though the money had not been available at the time. He said this meant government had used its available cash to finance some of the commitments, placing pressure on cash flow.
“We made a decision, even though we didn’t actually have the cash for it, meaning our cash flow goes under strain when we use money and our cash flow to pay for things like that,” he said.
The minister said some of the expenditure that had created pressure was capital expenditure rather than recurrent spending. He used the completion of the ICC as an example, saying the project would allow the country to start hosting conferences sooner instead of waiting longer for the facility to be completed.
Government’s 2026 budget set aside E7.78 billion for capital expenditure, while total expenditure was projected at E36.92 billion. The budget also projected a fiscal deficit of E5.02 billion.
Rijkenberg said the E1.5 billion that still needed to be raised would help fund projects being undertaken during the current financial year.
He said a large part of the current budget was going towards government-funded capital projects, including road construction. The minister said many roads, particularly rural roads, were being funded directly by government.
He said government was therefore raising money for these projects under what was broadly referred to as budget support. Rijkenberg said the funding would support capital projects taking place around the country.
Government has also been working to secure budget support from external sources. In June, Rijkenberg said the country was preparing to receive more than E1.6 billion in support from the World Bank, subject to the completion of required processes and approvals.
