By Thapelo Molefe
Gauteng finance MEC Lebogang Maile on Tuesday held a meeting with Tshwane mayor Nasiphi Moya in a desperate attempt to bring stability to the capital, and to improve service delivery and maintain financial recovery.
The meeting also sought to make a comprehensive assessment of the role that the provincial treasury should play in stabilizing the finances of the city as a means of improving its audit outcomes and financial governance.
“The City of Tshwane is facing significant financial challenges, and it’s imperative that we work together to address these issues,” Maile said.
“Our meeting today marked the beginning of a collaborative effort to stabilise the city’s finances and ensure good governance.”
Maile stressed that immediate fiscal prudence, including reducing non-essential spending, would be necessary to improve the City’s financial standing.
According to City of Tshwane, its debtor’s book has increased to a staggering R24.340 billion, with households shouldering 72.8% of the debt.
Tshwane’s outstanding creditor balance has also surged to R11.195 billion, driven primarily by increased obligations for bulk electricity and trade creditors.
Notably, Tshwane’s debt with Eskom now stands at R7.885 billion, while its obligation to Rand Water saw a slight reduction to R517.014 million, reflecting progress in adhering to a recent 45-day payment relief arrangement.
The newly elected City of Tshwane mayor told the media after the meeting that her administration was committed to adjusting the budget to address these challenges.
“We are actively working on adjustments that prioritise service delivery for our historically disadvantaged communities,” Moya.
She said key areas of discussion during the meeting centred on four critical financial challenges facing the City of Tshwane.
Firstly, addressing the unfunded budget was top priority, with plans to implement stringent cost-saving measures and fiscal prudence to get the city’s finances back on track.
Additionally, improving debt collection and reducing the city’s substantial debtor’s book, currently standing at R24.340 billion, was also identified as crucial to enhancing liquidity.
The provincial treasury also flagged concerns about low capital spending on essential grants, such as the Urban Settlements Development Grant, with Maile noting, “Underspending on these funds threatens essential projects. We are committed to supporting Tshwane to ensure these resources are fully utilised.”
Lastly, prioritising job security for city employees emerged as a vital consideration, with the recent approval of a five-year salary increment agreement aiming to cushion workers against financial difficulties.
The City of Tshwane has recently approved a five-year salary increment agreement for workers.
“We are committed to ensuring job security for our employees while also prioritising service delivery,” Moya said.
Meanwhile, provincial treasury has introduced initiatives to improve the credibility of annual financial statements, including the annual financial statements Accelerator Program and audit preparation workshops.
“These interventions aim to create a culture shift in financial statement preparation and improve the city’s financial position,” Maile added.
Maile added that the Gauteng government has prioritised municipal payments to ensure financial stability and sustainability.
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