R10bn to be spent on upgrading informal settlements, Sisulu tells Parliament

Minister of Human Settlements, Water and Sanitation Lindiwe Sisulu.

Picture: Gallo Images/Frennie Shivambu

  • The government is planning to spend R10 billion over the next three years to upgrade informal settlements.
  • This year, 679 informal settlements are planned for upgrading by the provinces and 344 by metros.
  • On Tuesday, Human Settlements, Water and Sanitation Minister Lindiwe Sisulu delivered her department’s budget vote speech.

The government plans to spend R10 billion over the next three years to upgrade informal settlements, as shacks continue to mushroom around urban towns.

On Tuesday, Human Settlements, Water and Sanitation Minister Lindiwe Sisulu told Parliament that 679 informal settlements were planned for upgrading by the provinces, and that 344 informal settlements would be targetted by metropolitan municipalities, this year.

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These plans for informal settlements and other social projects were revealed by Sisulu when she delivered her department’s budget vote speech.

Sisulu said: 

In the past few years, informal settlements were mainly upgraded through relocation, instead of in situ as envisaged in the policy. Unfortunately, in 2020-21, the performance of the programme was undesirable as we were still in the window period in preparation for the informal settlements upgrading grant.

She said R2.4 billion and R2.2 billion had been allocated for provinces and metros respectively, in the current budget to upgrade informal settlements.

Sisulu also said that, over the next three years, about R10 billion had been ring-fenced to accelerate the upgrading of informal settlements.

“The rapid growth of informal settlements in all major cities and towns necessitated a review of funding frameworks. The department has created a dedicated Upgrading of Informal Settlements Grant Funding Framework, exclusively set up to address the upgrading of informal settlement challenges in our country adequately,” she said.


Sisulu said, given the 7.0% economic decline in 2020, worsened by the Covid-19 pandemic, several relief measures had been implemented.

“The construction sector contributes 3.9% to South Africa’s GDP and employs 1.3 million people. However, amid Covid-19, this sector has experienced hardship as a result of severe disruptions.

“The Covid-19 pandemic plunged many human settlements projects across the country to a halt, and during these challenging times, we were compelled to re-evaluate contractual provisions and obligations, including incorporating health and safety measures to comply with Covid-19 regulations,” she said.

The measures include a rental relief programme for those living in social housing developments.

The distribution of R300 million of the R600 million rental relief will start as soon as all of the necessary checks and balances are properly in place.

The first phase would target tenants in the social housing market, Sisulu said.

During the 2020-21 financial year, the National Housing Finance Corporation (NHFC) processed 2 815 applications for government’s Finance Linked Individual Subsidy Programme (FLISP).

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Of these FLISP applications, 2 120 were approved with a total value of R111 million.

FLISP is a government programme intended to assist prospective home buyers whose income is not enough to qualify for a traditional bank loan, but exceeds the maximum limit applicable to access the government’s free basic house subsidy scheme.

Those in this bracket are commonly referred to as the “gap market” and earn between R3 501 and R22 000 per month.

Sisulu said the government had disbursed more than R60 million to 1 136 beneficiaries.