Alarm bells ringing over BCM’S finances

The financial health of the Buffalo City Metro is extremely concerning. The MMC for finance, Sakhumzi Caga, has admitted to council that the municipality is in the unhappy situation of living “hand to mouth” and needs to garner far more income from residents. Municipal cash reserves are dwindling because the council is not collecting anything close to what it should be getting from ratepayers and others who use the city’s services. Opposition councillors say they previously raised concerns about the city’s finances but were misled.

They even claim that BCM is days away from financial collapse, a terrifying prospect.

However, mayor Xola Pakati says though things are tight, there is sufficient cash to meet obligations.

Even if we allow for some exaggeration in the opposition’s claims, no major city should find itself in such straits.

Given the extent of need in the poorer areas of the metro, it is unthinkable that the council may find itself struggling to deliver to the needy because of poor cash flow.

Instead, the standard and extent of municipal services needs to improve across the metro to support business, tourism and development.

The finger of blame for the financial crisis should not point at the mayor, councillors and municipal officials alone.

A major reason for BCM’S financial woes is that municipalities were not allowed to pursue debtors during the Covid-19 lockdowns.

The parlous state of the economy since the pandemic struck means many households and businesses are struggling to pay bills.

Meanwhile, operating costs have climbed and the wage bill, too, is set to increase.

It is a slight relief that, according to Caga, revenue collection has improved in the past month.

However, far more effort is required to ensure that those who can afford to pay for their municipal services do just that.

At the same time, the municipality needs to ensure its billing system is accurate. Sending residents crazy, incorrect accounts understandably alienates people and pits them against the municipal authorities.

The national and provincial government also need to come to the party and advise and assist municipalities that are feeling the fallout from the economic climate, something which is beyond any council’s control.

Though the municipality will have to be cautious about expenditure until its financial situation improves, we hope this proves to be just a hiccup.

The need in BCM is almost as great as its potential and the municipality must be in a position to play a leading role.

Though the municipality will have to be cautious about expenditure until its financial situation improves, we hope this proves to be just a hiccup