City of Johannesburg finance MMC Dada Morero has to strike a “delicate balance” when he tables a multibillion-rand budget to roll out service delivery to the 6-million residents of SA’s largest and richest metro.
About R100m is needed over three years to address the metro’s infrastructure programmes, such as repairing roads and the electricity grid network, and the provision of water.
The city, which contributes almost 20% to national GDP and about 40% to Gauteng’s economy, is dogged by a high rate of joblessness, violent crime, poverty and inequality. And it suffers from low revenue collection, which fell 86% in October, translating into more than R500m of under-collection.
The city has said some residents could not pay their municipal rates and taxes due to job losses, while businesses owe the city about R7.4bn. The collection of revenue in township areas is low.
Council speaker Colleen Makhubele said the governing coalition will hold Morero at “gunpoint” to make good on his budget commitments, as the metro continues to take strain from crumbling water, electricity, sewerage and roads infrastructure, and persistent load-shedding.
In a media briefing to outline the council’s expectation of the budget for the 2023/24 financial year to be tabled by Morero on Tuesday, Makhubele said it was not a secret the metro was faced with low revenue collection and load-shedding, which affected the metro’s “core business of selling power”.
She said Morero is on a “knife edge” and the “bare minimum” in the metro’s coffers should be used to cover basic service delivery, rehabilitate the city’s infrastructure, and address job creation efforts and energy mix.
“It’s a delicate balance [that he has to strike] because of limited resources. Not all of us will be happy. At least the basic needs must be catered for, and the other issues we can do without, those, perhaps, could take a back [seat],” the speaker said.
Joburg executive mayor Kabelo Gwamanda said in his state of the city address last week that when the coalition took over power from a DA-led coalition earlier this year “we found a near-bankrupt government sitting with over R6bn in unpaid supplier invoices”.
Under the new political leadership, the metro approved a R2bn loan from the Development Bank of Southern Africa, to be used for operations, including its R900m per month salary bill.
Morero revealed in March that this year’s budget could be lower than in previous years. The budget has been increasing over the years, with an allocation of R68.1bn for 2020/21, R73.3bn for 2021/22, and R77.3bn for the 2022/23 financial year.
Makhubele bemoaned the report by the auditor-general (AG) report on the local government outcomes for 2021/22, which stated that of the 257 municipalities in SA only 38 received a clean audit. The municipalities racked up R4.74bn in fruitless and wasteful expenditure during the period under review.
“The AG report is clear on the performance of municipalities across the country, and about the worrying revenue collection levels — Joburg is no exception.
We have to continue to collect revenue to deliver on our community needs,” Makhubele said.
She stressed the budget has to be spent “where it’s supposed to be spent” and within the allocated time frame. “Any deviation and unforeseen issues will be brought to section 179 committees and dealt with within the boundaries of legislature.”
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