Tshwane loses R1.2bn as Covid-19 bites municipalities

Tshwane metro lost about R1.2 billion in uncollected revenue, with Gauteng municipalities losing roughly R4 billion in the past two months, due to the Covid-19 outbreak.

This emerged when Gauteng cooperative governance and traditional affairs (Cogta) MEC Lebogang Maile gave an update on the impact of the pandemic on municipalities in the province on Wednesday.

He said the Covid-19 outbreak hurt local government revenue collection which resulted in a low number of payment of rates in the past two months.

Maile said providing additional services to communities during the lockdown placed a big strain on municipal finances.

“Johannesburg metro lost R1.5 billion and Ekurhuleni roughly R800 million. Over and above these revenue losses, municipalities have had to provide emergency services to supply additional water to communities during this period, more toilets and greater frequency in refuse collection, sanitisation and decontamination, sites for quarantine, a shelter for those in need as well as food for indigent homes.”

He said revenue shortfalls led to municipalities not to pay creditors. Most affected by this were Eskom and Rand Water.

“The increased responsibilities owing to Covid-19, amidst revenue shortfalls, have meant that municipalities have had to shift resources from non-urgent and non-priority programmes, reprioritising spending to ensure that the provision of basic services to communities around the province, does not suffer during this period.”

He said the impact of Covid-19 bulk purchases and payments to creditors started to be felt more steeply towards the end of May.

“Municipalities have also had to spend additional unbudgeted funds for Covid-19 related expenditure and although funds for unmandated expenditure will be reimbursed, that is a process that is not immediate and as such has added to the current financial strain our municipalities are under.”

The national Treasury has availed R20 billion to municipalities to provide emergency water supply, sanitise public transport facilities and support vulnerable communities.

Maile said his department was working with Treasury to determine how best to allocate and transfer these funds, to reach the intended beneficiaries.

He said a sum of the Treasury funding would be prioritised to pay creditors such as Eskom and Rand Water.

“The emphasis should be on service delivery related issues (the money can’t be used to pay salaries), with municipalities allowed to use their discretion in addressing service delivery-related issues, in line with all relevant legislation.”

Originally appeared on Rekord Centurion

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