Inner City Gazette

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City’s R40 billion budget Staff Reporter news@inner-city-gazette.co.za

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Finance MMC delivers the City of Joburg budget speech at the Metro Centre. Pic: enocH leHunG

his week Joburg’s Finance MMC Clr Geoffrey Makhubo tabled the city’s budget, made up of R36.3 billion operational expenditure and R7.5 billion capital spend. A significant portion of the money will be spent on kick-starting the new spatial vision that will see the creation of high-density residential developments, alongside transport corridors, known as “Corridors of Freedom”. About R450 million will be spent on the rejuvenation of the Johannesburg inner city. Clr Makhubo announced that Joburg has become the first municipality in the country to present a multi-year budget of about R30.1 billion to council for approval; and the self-funding part of the budget will also for the first time grow from an average of 39% to above 65%. “We are able to achieve this despite the challenging global and regional economic environment. In the current financial year, our finances continued to strengthen, bolstered by sound financial strategies and forward thinking by the City,” Clr Makhubo said. He said the City had not sought external borrowings to meet its cash flow

requirements, further emphasising its financial strength. “We attribute these achievements to effective management and sound planning of our operations. There is strong commitment in the City to prudent financial management at all levels, tightened controls, strengthened policies and procedures and the attainment of a clean audit,” he said. “The City’s credit rating remains unchanged, with ratings agencies such as Fitch and Moody’s raising concerns about the deteriorating economic conditions and weakening public finance. Four of the key ratios that measure prudent financial management have improved. These are solvency, debt to revenue, net operating margin and cash coverage. It is on the base of the surplus of R4.9 billion and cash equivalents of R2.2 billion achieved in 2012 that we are able to increase our capital budget by over 60% for the 2013-2014 financial year. This is an investment in our future; the bridge towards the ‘Corridors of Freedom’,” he said. Clr Makhubo added that ‘residual issues’ remained in the billing challenges that the City faced in the past year or so. “In the first three months of this year, the City rolled out a regional campaign in its walk-in centres to resolve

non-technical queries, reduce customer waiting times, provide technical product knowledge and promote a culture of efficiency and professionalism. As part of its commitment to increase its financial sustainability, the City developed a 15 point financial plan that would over the next 10 years focus on completeness of revenue, strategic chain management incorporating economic transformation and expenditure management.” Clr Makhubo said the 2013-2014 medium term budget provided the City with an important bridge to link it with the future. “In this period we continue to focus on ensuring financial sustainability while delivering on the programmes outlined in the Integrated Development Plan (IDP) and Growth and Development Strategy 2040 (GDS 2040). It reaffirms our commitment to the prudent management of the City’s finances.” The lion’s share of the operating budget has been given to the Sustainable Services Cluster, which oversees and coordinates the bulk of the City’s service delivery obligations. The R21.9 billion that the cluster has received for its operational expenditure is more than half of the City’s total operating budget for the 2013-2014 financial year.


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