Cape Town - The City of Cape Town is the most flush with cash of all the country’s metros.
The State of City Finances report released last week, which details the finances of nine of South Africa’s biggest municipalities (eight are metros), found that when it came to the cash position of municipalities, cities had on average 1.42 months worth of cash available to meet their needs. Johannesburg is in the risky position of having just 0.35 months worth of cash available, while Cape Town has more than double the national average at 3.19 months worth.
“Cities need to have sufficient cash to meet their financial commitments,” the report states.
The release of the report comes as the local council has come in for a barrage of criticism from the ANC caucus, which has accused it of fiscal dumping after the announcement that 92.9 percent of the city’s 2012/13 budget had been spent by year-end. Mayoral committee member for finance Ian Neilson has, however, countered that the ANC has misread the facts.
Meanwhile, South African Cities Network chief executive Sithole Mbanga said municipalities were under increasing financial pressure, “grossly underfunded by the system” and facing rising costs, such as electricity.
This, with the fact that services were becoming increasingly unaffordable for households, meant municipalities could become trapped with high debt levels.
The three most heavily indebted cities were eThekwini, Johannesburg and Tshwane.
Cape Town was also at the top of the list when it came to the provision of the most affordable services to the poor.
Using a system where property value and water and electricity usage are used to determine four income bands, it found that for those living in a property valued at R100 000, and using 20 kilolitres of water and 400kW of electricity a month, Cape Town was the most affordable.
The average service package for this income band cost R551 a month in 2011; the national average was R804.
For those in the upper income band, with property valued at R1 million, and using 1 500kW of electricity and 40 kilolitres of water, the city is slightly less affordable. Services in this band cost an average of R3 332 a month in Cape Town, more than the national average of R3 305, and more expensive than Nelson Mandela Bay, Johannesburg, Ethekweni and Mangaung.
Buffalo City has the most expensive services in both the lowest and highest income brackets in the country.
Deputy Cape Town mayor Ian Neilson said the city was in a financially stable position and improving.
“The city inherited a very unstable financial position from previous municipalities and it was only in around 2007 that things started to stabilise.”
He said the city had increased its collection rates to 96 percent – an area which had been a weakness before. This allowed the city to invest a record R5.8 billion in capital expenditure and a further R2.6bn in repairs and maintenance in the last year.
“Over the past five years, we’ve spent R23bn on capital expenditure. R11bn of this was from national grants, R5bn was from borrowing and the remaining R5bn or R6bn has been from our own funds.”
Weekend Argus
