The latest statistics showing the capital expenditure performance of South Africa’s public sector make for interesting reading. Published by Statistics South Africa (Stats SA), the Capital Expenditure by Public Sector Survey shows that a combined R202.2-billion was invested on capital programmes in 2012, a R21.2-billion increase on the R181-billion invested in 2011.

However, it also indicates that capital expenditure by the public sector could decline to R183.6-billion in 2013, before recovering to R203-billion and R206-billion in 2014 and 2015 respectively.

The survey results reveal that public corporations, including large utilities such as Eskom and Transnet, contributed 55% to the overall total. In fact, the 52 public corporations surveyed invested a combined R110.4-billion last year, up from R90.5-billion in 2011.

The second-largest contribution, at 20%, arose from 278 municipalities, which collectively invested R40.6-billion.

Provincial administrations and their institutions invested R27.4-billion (14%), national government R12-billion (6%), and higher education institutions R4.8-billion (2%). The 3% balance, or R7-billion, was attributed to 213 entities clustered under a heading entitled ‘extra-budgetary accounts and funds.

Construction works captured the lion’s share of the expenditure at R137-billion, but represented only a modest 4% share overall growth. Nevertheless, between 2008 and 2012, the amount spent by public-sector institutions on new construction works more than doubled from R68-billion to R137-billion.

But the bulk of the R21.2-billion year-on-year increase was directed towards plant, machinery and equipment, which rose by R13.6-billion to R38.3-billion.

The value of new construction works rose by R4.6-billion, transport equipment by R2-billion, land and existing buildings by R470-million, other fixed assets by R350-million and leased assets and investment property by R134-million. No category of investment showed a decline.

However, Statistician-General Pali Lehohla says figures show that municipalities are still underspending on vital equipment related to service delivery. For the financial year to June 30, 2012, municipalities spent R3.9-billion on plant, machinery and equipment, while they invested R31.4-billion on new construction works. “Employment-related costs in municipalities continue to grow. But there is no spending on equipment and machinery. This raises the question: Who is doing the work?” Lehohla asked.

Also worrying is the fact that, despite this rise in public investment, many firms and sectors exposed to the gross fixed capital formation remain depressed and distressed. Unless, and until, the private sector is given the confidence it requires to join in, the impact of this public scale-up will remain muted.