Corruption and poor planning crippling housing delivery, says Black Business Council

The Black Business Council (BBC) has criticised government’s decision to reprioritise billions of rand earmarked for housing projects after Treasury revealed widespread delivery failures in the sector despite years of significant spending.

A Treasury review found housing completions have fallen by about 60% since 2018, while serviced housing sites have declined by roughly 50%, raising concerns about whether public spending is translating into tangible outcomes on the ground.

BBC deputy president Gregory Mofokeng said South Africa’s housing challenges were rooted less in a lack of funding than in poor planning, weak implementation capacity and corruption.

His comments came after Treasury informed Parliament’s appropriations committee that it had temporarily reprioritised R7.8 billion from housing allocations while reforms were implemented to improve performance in the sector.

The disclosure formed part of a broader budget adjustment process in which Treasury defended reallocations worth more than R54bn, arguing that the changes were necessary to improve disaster resilience, strengthen municipalities, modernise revenue collection and maintain fiscal stability.

However, Treasury’s assessment of the housing sector drew the sharpest attention.

According to the review of the Human Settlements Development Grant, government spent about R12.9bn on professional fees over the past seven years, yet almost 60% of those costs could not be linked to completed housing projects.

Treasury told MPs that expenditure alone could no longer be treated as a measure of success because departments were often spending most of their budgets while delivery outcomes deteriorated. The findings point to weaknesses in project preparation, procurement, implementation and accountability.

For Mofokeng, the results confirm concerns about the way housing projects are managed.

He said housing developments were complex, with government projects often taking up to a decade to complete, compared with about three years in the private sector. A major challenge, he said, was the lengthy process of installing essential bulk infrastructure such as sewer systems, electricity and water networks before houses could be built.

Mofokeng said policy had shifted from constructing housing units first to prioritising the installation of services before building homes. The change had slowed delivery.

He questioned whether government departments had sufficient capacity to move projects from the planning stage into implementation. “There are projects that have been sitting in planning for years without progressing to development.”

Mofokeng said poor oversight and corruption had compounded the problem, alleging that some contractors had been paid for incomplete projects through collusion with officials.

Mofokeng said it was common to find developments where contractors had received payment for hundreds of housing units despite only a fraction of the work being completed.

He said the housing sector’s relatively low barriers to entry had created additional challenges. Unlike large-scale roads, bridges or high-rise projects that required specialised expertise, housing contracts were often awarded to small and emerging businesses, including youth- and women-owned enterprises.

While supporting transformation objectives, Mofokeng said the emphasis on broad participation had to be balanced with delivery capability.

“We are seeing more emerging companies being given large portions of housing construction work at the expense of delivery.”

He said the Department of Human Settlements appeared to be facing funding pressures, further complicating efforts to address the housing backlog.

The concerns come as opposition parties intensify scrutiny of housing expenditure.

The DA has called for accountability from Gauteng Human Settlements MEC Tasneem Motara after it emerged that 74 procurement transactions worth about R401 million had been flagged for forensic investigation in the Gauteng Department of Human Settlements.

The transactions, which fall under the 2025/2026 financial year, are set to be subjected to external forensic investigations after questions were raised in the Gauteng Provincial Legislature.

DA MPL Mervyn Cirota said the revelations exposed concerns about procurement practices and the department’s ability to safeguard public funds intended for housing delivery.

The department’s responses revealed allegations ranging from contracts awarded to bidders who were not tax compliant and unfair bid evaluation processes to unclear project specifications and the appointment of service providers that allegedly did not meet the requirements.

Among the transactions under scrutiny is the R161.5m Sicelo housing project awarded to Temi Construction, where concerns relate to tax compliance and the fairness of the allocation process.

Another project involves Makgotamishe Building Construction, which received more than R11m for the construction and completion of 657 houses despite allegations that the company was not tax compliant when the contract was awarded.

The department has not identified officials or contractors who might be held accountable, saying those determinations would depend on the outcome of the forensic investigations.

The Black Business Council (BBC) has criticised government’s decision to reprioritise billions of rand earmarked for housing projects after Treasury revealed widespread delivery failures in the sector despite years of significant spending.

A Treasury review found housing completions have fallen by about 60% since 2018, while serviced housing sites have declined by roughly 50%, raising concerns about whether public spending is translating into tangible outcomes on the ground.

BBC deputy president Gregory Mofokeng said South Africa’s housing challenges were rooted less in a lack of funding than in poor planning, weak implementation capacity and corruption.

His comments came after Treasury informed Parliament’s appropriations committee that it had temporarily reprioritised R7.8 billion from housing allocations while reforms were implemented to improve performance in the sector.

The disclosure formed part of a broader budget adjustment process in which Treasury defended reallocations worth more than R54bn, arguing that the changes were necessary to improve disaster resilience, strengthen municipalities, modernise revenue collection and maintain fiscal stability.

However, Treasury’s assessment of the housing sector drew the sharpest attention.

According to the review of the Human Settlements Development Grant, government spent about R12.9bn on professional fees over the past seven years, yet almost 60% of those costs could not be linked to completed housing projects.

Treasury told MPs that expenditure alone could no longer be treated as a measure of success because departments were often spending most of their budgets while delivery outcomes deteriorated. The findings point to weaknesses in project preparation, procurement, implementation and accountability.

For Mofokeng, the results confirm concerns about the way housing projects are managed.

He said housing developments were complex, with government projects often taking up to a decade to complete, compared with about three years in the private sector. A major challenge, he said, was the lengthy process of installing essential bulk infrastructure such as sewer systems, electricity and water networks before houses could be built.

Mofokeng said policy had shifted from constructing housing units first to prioritising the installation of services before building homes. The change had slowed delivery.

He questioned whether government departments had sufficient capacity to move projects from the planning stage into implementation. “There are projects that have been sitting in planning for years without progressing to development.”

Mofokeng said poor oversight and corruption had compounded the problem, alleging that some contractors had been paid for incomplete projects through collusion with officials.

Mofokeng said it was common to find developments where contractors had received payment for hundreds of housing units despite only a fraction of the work being completed.

He said the housing sector’s relatively low barriers to entry had created additional challenges. Unlike large-scale roads, bridges or high-rise projects that required specialised expertise, housing contracts were often awarded to small and emerging businesses, including youth- and women-owned enterprises.

While supporting transformation objectives, Mofokeng said the emphasis on broad participation had to be balanced with delivery capability.

“We are seeing more emerging companies being given large portions of housing construction work at the expense of delivery.”

He said the Department of Human Settlements appeared to be facing funding pressures, further complicating efforts to address the housing backlog.

The concerns come as opposition parties intensify scrutiny of housing expenditure.

The DA has called for accountability from Gauteng Human Settlements MEC Tasneem Motara after it emerged that 74 procurement transactions worth about R401 million had been flagged for forensic investigation in the Gauteng Department of Human Settlements.

The transactions, which fall under the 2025/2026 financial year, are set to be subjected to external forensic investigations after questions were raised in the Gauteng Provincial Legislature.

DA MPL Mervyn Cirota said the revelations exposed concerns about procurement practices and the department’s ability to safeguard public funds intended for housing delivery.

The department’s responses revealed allegations ranging from contracts awarded to bidders who were not tax compliant and unfair bid evaluation processes to unclear project specifications and the appointment of service providers that allegedly did not meet the requirements.

Among the transactions under scrutiny is the R161.5m Sicelo housing project awarded to Temi Construction, where concerns relate to tax compliance and the fairness of the allocation process.

Another project involves Makgotamishe Building Construction, which received more than R11m for the construction and completion of 657 houses despite allegations that the company was not tax compliant when the contract was awarded.

The department has not identified officials or contractors who might be held accountable, saying those determinations would depend on the outcome of the forensic investigations.

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The Black Business Council (BBC) has criticised government’s decision to reprioritise billions of rand earmarked for housing projects after Treasury revealed widespread delivery failures in the sector despite years of significant spending.

A Treasury review found housing completions have fallen by about 60% since 2018, while serviced housing sites have declined by roughly 50%, raising concerns about whether public spending is translating into tangible outcomes on the ground.

BBC deputy president Gregory Mofokeng said South Africa’s housing challenges were rooted less in a lack of funding than in poor planning, weak implementation capacity and corruption.

His comments came after Treasury informed Parliament’s appropriations committee that it had temporarily reprioritised R7.8 billion from housing allocations while reforms were implemented to improve performance in the sector.

The disclosure formed part of a broader budget adjustment process in which Treasury defended reallocations worth more than R54bn, arguing that the changes were necessary to improve disaster resilience, strengthen municipalities, modernise revenue collection and maintain fiscal stability.

However, Treasury’s assessment of the housing sector drew the sharpest attention.

According to the review of the Human Settlements Development Grant, government spent about R12.9bn on professional fees over the past seven years, yet almost 60% of those costs could not be linked to completed housing projects.

Treasury told MPs that expenditure alone could no longer be treated as a measure of success because departments were often spending most of their budgets while delivery outcomes deteriorated. The findings point to weaknesses in project preparation, procurement, implementation and accountability.

For Mofokeng, the results confirm concerns about the way housing projects are managed.

He said housing developments were complex, with government projects often taking up to a decade to complete, compared with about three years in the private sector. A major challenge, he said, was the lengthy process of installing essential bulk infrastructure such as sewer systems, electricity and water networks before houses could be built.

Mofokeng said policy had shifted from constructing housing units first to prioritising the installation of services before building homes. The change had slowed delivery.

He questioned whether government departments had sufficient capacity to move projects from the planning stage into implementation. “There are projects that have been sitting in planning for years without progressing to development.”

Mofokeng said poor oversight and corruption had compounded the problem, alleging that some contractors had been paid for incomplete projects through collusion with officials.

Mofokeng said it was common to find developments where contractors had received payment for hundreds of housing units despite only a fraction of the work being completed.

He said the housing sector’s relatively low barriers to entry had created additional challenges. Unlike large-scale roads, bridges or high-rise projects that required specialised expertise, housing contracts were often awarded to small and emerging businesses, including youth- and women-owned enterprises.

While supporting transformation objectives, Mofokeng said the emphasis on broad participation had to be balanced with delivery capability.

“We are seeing more emerging companies being given large portions of housing construction work at the expense of delivery.”

He said the Department of Human Settlements appeared to be facing funding pressures, further complicating efforts to address the housing backlog.

The concerns come as opposition parties intensify scrutiny of housing expenditure.

The DA has called for accountability from Gauteng Human Settlements MEC Tasneem Motara after it emerged that 74 procurement transactions worth about R401 million had been flagged for forensic investigation in the Gauteng Department of Human Settlements.

The transactions, which fall under the 2025/2026 financial year, are set to be subjected to external forensic investigations after questions were raised in the Gauteng Provincial Legislature.

DA MPL Mervyn Cirota said the revelations exposed concerns about procurement practices and the department’s ability to safeguard public funds intended for housing delivery.

The department’s responses revealed allegations ranging from contracts awarded to bidders who were not tax compliant and unfair bid evaluation processes to unclear project specifications and the appointment of service providers that allegedly did not meet the requirements.

Among the transactions under scrutiny is the R161.5m Sicelo housing project awarded to Temi Construction, where concerns relate to tax compliance and the fairness of the allocation process.

Another project involves Makgotamishe Building Construction, which received more than R11m for the construction and completion of 657 houses despite allegations that the company was not tax compliant when the contract was awarded.

The department has not identified officials or contractors who might be held accountable, saying those determinations would depend on the outcome of the forensic investigations.