Edition April 2025

Recent surveys paint a concerning picture of South Africans' declining trust in their public institutions. Statistics South Africa recorded reduced usage of government services between 2019 and 2023, spanning public transport, healthcare facilities and schools. Meanwhile, Afro Barometer revealed that 53% of South Africans trust their courts "just a little" or "not at all." Political parties fare no better, with an Ipsos poll finding that 35% of registered voters feel no political party adequately represents their views.

This erosion of trust is occurring despite increased government spending on the social wage, including free basic services, pensions and various support grants. The troubling reality is that citizens who can afford alternatives are increasingly opting out of public services in favour of private options – a trend that underscores the growing trust deficit in South African governance.

In emerging economies like South Africa, public institutions function as more than administrative bodies, they are fundamental pillars of inclusive development. Without public trust, even well-intentioned government programmes struggle to achieve their objectives. This trust deficit threatens the social contract between citizens and the State, potentially undermining democratic institutions and societal cohesion.

Trust in public institutions is built primarily through responsible stewardship of public funds and efficient service delivery.

Responsible governance requires transparent accounting, while efficiency demands timely, responsive service provision within evolving social, economic and environmental contexts – particularly important under financial constraints that necessitate difficult trade-offs and political maturity.

South African public institutions present a mixed picture, with islands of excellence amid broader systemic challenges.

There are significant disparities in institutional capacity between departments and regions, with service delivery characterised by stark urban-rural divides. Many state-owned enterprises face severe operational and financial difficulties despite substantial government support.

The evolution of these institutions since 1994 followed an expansionist trajectory under the Reconstruction and Development Programme (RDP), which prioritised redistribution to address inequality, poverty and unemployment. Between 2002 and 2012, health and police departments saw employment increases of 44% and 50% respectively, while public employee remuneration consistently outpaced inflation.

During this period, government expanded social safety nets, with transfer payments to poor households increasing from 3% to 4.6% of the gross domestic product. Capital spending also surged through both budget-financed projects and state-owned company investments. These expansions were supported by strong eco- nomic growth and favourable commodity prices.

However, external shocks beginning with the 2007 global financial crisis dramatically altered South Africa's fiscal landscape. Economic growth slowed, affecting this emerging market that depends heavily on external finance, portfolio flows and foreign direct investment.

National Treasury's role in rebuilding trust Recognising the trust deficit and its implications, the National Treasury has prioritised developing public servant capacity. A key initiative is the Municipal Revenue Management Improvement Programme (MRMIP), which offers support to all government spheres to enhance local government financial management compliance, monitoring and oversight.

The MRMIP provides direct capacity support to:

• municipal budget and treasury offices in general financial management;
• municipal finance units of provincial treasuries; and
• three National Treasury chief directorates handling local government budget analysis, Municipal Finance Management Act implementation, and supply chain management policy.

These interventions aim to address problems identified by the Auditor-General, particularly in the municipal sector – declining financial positions of municipalities, leadership issues and governance instability, and widespread municipal dysfunction.

The path forward

Rebuilding trust in public institutions requires acknowledging current fiscal constraints while improving service delivery efficiency.

The National Treasury's focus on enhancing financial management capacity reflects recognition that financial
probity forms the foundation of public trust.

In a fiscally constrained environment, public institutions must evolve beyond the expansionist assumptions that characterised earlier development approaches. This evolution demands greater accountability, transparency and efficiency in public resource management – areas where the National Treasury plays a crucial oversight role.

For South Africa to advance its development agenda, the trust deficit must be addressed through improved governance, responsible financial management and efficient service delivery. Only then can public institutions fulfil their essential role as catalysts for inclusive development in the face of economic challenges.