Funds allocated to climate-related disaster resilience

The South African government is taking proactive steps to address the challenges posed by climate change on local infrastructure. In response to the growing pressures imposed by climate change, a dedicated resource pool has been established.

“In this regard, R372 million has been added to the Municipal Disaster Response Grant, while R1.2 billion has been added to the Municipal Disaster Recovery Grant, to cover the repair and rehabilitation of infrastructure damaged by flooding in February and March 2023,” announced Minister of Finance Enoch Godongwana in Parliament during the presentation of the Medium Term Budget Policy Statement (MTBPS).

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The government recognizes that mitigating environmental risks associated with climate change must be accompanied by addressing the financial and economic risks it presents.

National Treasury to develop a disaster risk financing strategy

The National Treasury is actively working on developing a disaster risk financing strategy, which will enhance existing risk financing instruments and reduce the overreliance on budget reallocations.

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This strategy adopts a risk-layering approach, incorporating various financing instruments based on the incidence and severity of climate-related shocks. It aims to strengthen governance, improve data quality, and ensure financial and fiscal sustainability, with a draft expected to be ready by 2024/25.

Additionally, the National Treasury has initiated a climate budget tagging system to integrate climate considerations into public financial management processes. The project has progressed through consultation, awareness-raising workshops, and piloting across different government levels.

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Strengthening South Africa’s response to climate change

The next phase will refine the framework, consult stakeholders, revise guidance materials, and establish governance arrangements, ultimately strengthening South Africa’s response to climate change impacts on its infrastructure and financial systems.

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