Amidst economic strain, the KZN government has managed to gather R700m to support cash-strapped departments and fund Zulu King Misuzulu kaZwelithini’s legal expenses.

Tabling his adjustment budget in the KZN Legislature in Pietermaritzburg, Treasury MEC Francois Rodgers said the funds came from unspent conditional grants, unexpected revenue, and unused contingency reserves.

“These three sources resulted in R729,3m in provincial cash resources being available for allocation in this adjustments budget,” Rodgers said.

The additional funds arrive as departments like Education, Social Development, and Health struggle financially due to insufficient allocations from the national government.

The government’s recent 4.7% public sector wage hike has further strained provincial budgets.

“The 2024 wage agreement was implemented at a 4.7% increase, which is 0.3% higher than the percentage National Treasury had indicated the province should budget for,” Rodgers told MPLs.

The budget pressure resulting from the 2024 wage agreement was calculated at R4.5b for our province.

While investor confidence in KZN had grown, aided by the government of provincial unity (GPU), Rodgers highlighted ongoing economic challenges.

“Real regional gross domestic product has declined from 1.1% in 2023 to an estimated 0.9% this year, with an anticipated expansion to 2% in 2025,” he said.

“At these growth rates, the provincial economy remains considerably below its potential, especially compared to the 4.2% annual average growth rate between 2001 and 2006.

“High unemployment remains a major issue, with 31.2% of the population unemployed, equating to about 1 287 million people.”

Unlike the national government’s strategy of increasing borrowing, Rodgers said KZN has prioritised income generation.

“Departments have been requested to produce detailed turnaround plans to reduce fiscal risk, while Provincial Treasury’s cash management unit ensures the province does not fall into overdraft,” Rodgers said.

Rodgers’ party, the DA, is part of the GPU alongside the IFP, ANC, and NFP.

The coalition, formed after a stalemated May election, has been positively received by businesses and civil society.

On the R10m allocated to King Misuzulu’s Royal Household Trust for legal battles over the Zulu royal succession, Rodgers said he had a constitutional obligation to release funds since the trust fell under the Office of the Premier.

“This administration has been largely welcomed by the business community and civil society, showing eagerness to resolve challenges and promote public-private partnerships to grow the economy,” Rodgers said.