The South African Cities Network’s 2022 Report on the State of the City Finances across the country shows that leadership instability, a declining economy and the COVID-19 pandemic contributed to weak municipal finances.
Large metros are owed billions of rands in rates and this could hamper their ability to deliver basic services. The City of Johannesburg is owed R47 billion.
This week, the Joburg council also rejected the DA-led multi-party’s proposal for a R2 billion short-term loan from the Development Bank of Southern Africa to ensure service delivery continuity.
The Network’s Danga Mughogho says, “Instability at that top level often has a knock down effect, further down in the administration. It does that through affecting the senior management who are reporting to the City Manager who then reports to the Mayoral Committee and a knock-on effect to the junior employees, so people are not sure where priorities lie, priorities change when you have changing political parties, decisions change. This has a direct impact on things like agreeing on a budget.”
City of Joburg’s financial challenges: Mbalenhle Mthethwa updates
Earlier this month, the African National Congress (ANC) in Johannesburg indicated that the City of Johannesburg had serious financial problems and that Mayor Dr Mpho Phalatse had failed to collect revenue for services such as electricity and water.
Briefing the media in Johannesburg, Phalatse said, “There was little to no truth about what was said, in the main because the figures are unaudited. We have nothing to hide because the audited figures will be presented before council as per the legislation.”
“Notably we are one of the few municipalities across the country that does not owe Eskom or Rand Water. In the coming days we will give a full account of the state of the City’s finances as they stand,” she added.
Source: SABC News (sabcnews.com)