Intergovernmental grants rise to R1,14 trillion

Intergovernmental grants rise to R1,14 trillion

One of the most significant features of national government spending is transfer payments to other levels of government and public institutions. These transfers, classified as "grants" under the Government Finance Statistics (GFSM 2014) framework,¹ enable provinces, municipalities and other public institutions to deliver services on behalf of the government.

According to the latest Financial statistics of national government statistical release,² grants amounted to R1 144,3 billion in the 2024/2025 fiscal year, representing a rise of R42 billion from R1 102,3 billion in 2023/2024.

Grants remain the largest expenditure item, accounting for 54% of total operating cash expenditure. This illustrates that the national government primarily performs a financing role by allocating resources to other institutions responsible for implementing programmes and delivering public services.

Provincial governments continued to receive the largest share (64%) of grant funding in 2024/2025, increasing from R706,3 billion in 2023/2024 to R730,6 billion. Gauteng was the largest provincial beneficiary, followed by KwaZulu-Natal (see Figure 1 below).

The continued support through grants to local government increased from R157,7 billion to R167,7 billion, a rise of R10 billion. These grants support municipalities in providing essential services such as water supply, sanitation, electricity infrastructure and other capacity-building programmes. The continued growth in these grants reflects government's commitment to strengthening municipal infrastructure and service delivery.

Grant payments to extra-budgetary accounts & funds (EBAs)increased from R189,5 billion in 2023/2024 to R193,9 billion in 2024/2025. These institutions perform public functions outside national and provincial government departments and include public institutions responsible for transport infrastructure, research, skills development, and other national and provincial programmes. Examples include the South African Revenue Service, the National Development Agency, and the National Student Financial Aid Scheme.

Higher education institutions also received additional support, with grants rising from R45,0 billion to R47,8 billion. This helped finance universities and related higher education programmes.

International grants to foreign governments and international institutions remain relatively small compared with domestic grants, increasing slightly from R3,9 billion in 2023/2024 to R4,3 billion in 2024/2025. This represented less than 1% of total grants.

The allocation of national government grants can be broken down further by function, providing insight into what the money was allocated for. Grants categorised under general public services accounted for R762,9 billion. Education was the second largest function, followed by economic affairs (see Figure 2 below).

These trends demonstrate the expanding role of intergovernmental grants in financing public services across South Africa. For more information, download the 2024/2025 Financial statistics of national government statistical release and associated Excel files here.

¹ International Monetary Fund, Government Finance Statistics Manual, 2014 (download here).

² Note that the Financial statistics of national government statistical report covers data from national government departments. Local government financial statistics will be published on 25 June 2026. Detailed releases for other levels of government (i.e. provincial, extra-budgetary accounts & funds and higher education institutions) will be published during the course of the year. A consolidated document will be published in November, providing a financial overview of the entire government sector for the 2024/2025 fiscal year.

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