Joburg to rebase its budget
The City of Joburg is considering readjusting its budget downward, involving about R6bn, amid cash flow challenges dogging SA’s economic hub.
Johannesburg is SA’s largest and richest metro and has a budget of R80.9bn for the 2023/24 financial year. It is run by a coalition of the ANC, EFF and Patriotic Alliance after the 2021 municipal elections failed to produce a clear winner.
Finance MMC Dada Morero said the city’s budget steering committee will meet later this week to discuss the details of the budget rebasing.
“The rebasing will be possible around R6bn ... once we conclude, the budget steering committee will have a better sense of the total rebasing and the actual cause of the problem,” he said.
The municipality needs at least R4.3bn a month to meet the service delivery needs of its 6million plus residents.
During the 2022/23 financial year, revenue collection fell to 86%, translating into more than R500m of undercollection. The city expects the trend to continue in the current period.
In December 2023, the city conceded it had a revenue collection crisis, which mostly came from the sale of water and electricity to residents. The city said the monthly migration of 18,000 people to the city was placing a strain on its resources.
Last year, the city council approved a R2bn loan from the Development Bank of Southern Africa to be used for operations, including its R900m per month salary bill.
DA caucus leader Belinda Kayser-Echeozonjoku said the rebasing of the budget is likely to affect service delivery.
“When we cautioned the MMC of finance that the budget is unfunded, unrealistic and unworkable, we were ridiculed,” she said.
“Consistently, we are inundated with service providers advising that their invoices have, once more, gone unpaid. It should come as no surprise, as the doomsday coalition cannot even uphold a central pillar of effective governance — the collection of rates and taxes.
“The city applied for a local state of disaster declaration, which was not approved.”