The Eastern Cape just lost 21% of a key housing grant – and the Northern Cape scored big

Business Insider SA
Row of low-cost RDP homes under construction in We
Low-cost homes under construction in the Western Cape. (Getty)
  • R588 million in national housing grants have been yanked from four provinces, and the money handed to four different provinces.
  • Only KwaZulu-Natal is not affected by the reallocation.
  • The Eastern Cape has lost 21% of its share of the human settlements development grant – while the Northern Cape's grant increased by 63%.
  • Gauteng, the Western Cape, and Mpumalanga also scored more money.
  • The Eastern Cape’s fellow losers are the Free State, Limpopo, and North West.
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A rejig in a key national housing grant has slashed the money going to the Eastern Cape by more than one-fifth, while the Northern Cape has seen a massive increase.

Finance minister Tito Mboweni on Monday gazetted a list of stopped and new allocations in money that had been due to go to provinces as part of the R14.9 billion Human Settlements Development Grant. The conditional grant is used to build houses, and upgrade basic infrastructure such as sewage systems.

The total grant will remain exactly the same, but a total of R588 has been taken away from four provinces, and distributed among four other provinces, under Treasury powers to withhold cash from non-performing provinces and municipalities, and hand it to those who can spend it properly.

See also | These are SA’s new priority housing areas, due for a ‘significant’ portion of govt funding

Only KwaZulu-Natal's share of the budget is not affected, with that province neither losing nor gaining any money in the process.

On a municipal level, the Treasury warned after the 2021 Budget speech, it would use the reallocation of conditional grants as part of a carrot-and-stick approach to improving standards.

The Human Settlements Development Grant is divided between provinces roughly along population lines, with 28% assigned to Gauteng, 20% to KwaZulu-Natal, and the remaining half divided between the other provinces.

The money being shunted from one set of provinces to another represents less than 4% of the total grant in the budget year – but has a massive impact on some provinces.

Here is how each province is affected by reallocations of the Human Settlements Development Grant.

  • Northern Cape: gain R200 million, up 63% from its original allocation
  • Eastern Cape: loses R338 million, down 21% from is original allocation
  • Mpumalanga: gains R138 million, up 14% from its original allocation
  • Free State: loses R100 million, down 12% from its original allocation
  • Western Cape: gains R150 million, up 9% from its original allocation
  • North West: loses R100 million, down 7% from its original allocation
  • Limpopo: loses R50 million, down 5% from its original allocation
  • Gauteng: gains R100 million, up 2% from its original allocation

(Compiled by Phillip de Wet)

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