City of Tshwane‘s financial woes deepen as residents and businesses owes over R24 billion

Gauteng MEC of Finance and Economic Development Lebohang Maile has expressed concern over City of Tshwane’s ineffective credit control policy, following his revelation that the cash-strapped metro is owed over R24 billion by residents and businesses.

Maile made the revelation during a joint media briefing about the state of finances and governance in the administrative capital.

He told the media that the bulk of the debt emerged from households with a staggering R17.7 billion at 72.8%, while commercial businesses owe R5.8 billion at 23%.

Maile explained concern about the issue of customers not paying for the services rendered by the metro as the main issue.

“This indicates that the implementation of the credit control policy is not effective. This has a negative impact on the liquidity of the municipality,” he said.

Maile voiced huge concerns as the debt increased from R22.7 billion as pre-audited figures of 2024 financial year to more than R24 billion.

“The City of Tshwane’s status book, meaning the people who owe them, is about R24.3 billion as of September 30, 2024.”

The debt contributes to the metro’s financial woes, as the municipality has been operating on an unfunded budget since 2021.

Meanwhile, City of Tshwane mayor Dr Nasiphi Moya admitted that the metro has been operating on an unfunded budget and revealed the current budget deficit of more than R4 billion.

She expressed that tackling the metro’s financial crisis is essential to be able to fulfil their ambition of delivering services to residents, as unresolved financial problems can hinder effective supply of services.

“The reality that we are confronted with is that the first thing that this administration must do is to exercise discipline in a way that we have an ambitious target of achieving a funded budget in the next few months,” Moya said.

She said her administration is committed to effective expenditure and revenue collection, with the aim of scooping a funded budget for the first time after a couple of years.

“The second thing is the issue of expenditure patterns, it's not a secret that for instance we owe our workforce in the City, two years that they have not got an increase.”

“We are in talks in terms of how we manage such amounts so that we don't shock the system and do not shock the expenditure patterns,” Moya said.

She said what is more concerning to her is the debt of R6 billion which is owed by the metro to the power utility, Eskom.

“We have started conversations with the minister of electricity (Kgosientsho Ramokgopa) and we would share what the details are, because we believe that if we deal with the issue of Eskom debt we going to alleviate a lot of pressure on the side of the fiscas of the City,” Moya said.

IOL Politics

Mon, 04 Nov 2024 04:34:07 GMTSimon Majadibodu

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