Tshwane’s financial fortunes improve after huge deficit cut

The City of Tshwane has revealed that it has managed to reduce the deficit on its operating accounts by R3.4 billion. 

Tshwane has been experiencing financial troubles as well as challenges to maintaining basic service delivery following the eight-month period where the city was under administration.

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Earlier this year, Tshwane mayor Randall Williams admitted that the city was technically bankrupt, as its liabilities of about R14 billion exceeded its assets by R3 billion.

Deficit

The metropolitan municipality has since been trying to “rectify” the R4 billion deficit which it inherited from the city’s administrators in November last year, which has now been reduced by approximately 85%.

“It is commonly known that when this administration assumed office in November 2020, we inherited a deficit on the operating account from the provincial administrators for the 2019-2020 financial year that had exceeded R4 billion.

“This deficit placed us in an incredibly difficult financial position as we immediately had to get to work to stabilise city finances and move towards a more sustainable financial position.

“The first intervention was to approve an adjustments budget that reduced expenditure to match the lower income levels the city was facing.

“I am pleased to note that as of the end of June 2021 in reviewing our financial performance we had reduced the deficit on the operating account by R3.4 billion with the City now only facing a deficit of R934 million which we intend to eradicate in the coming financial year that has started on 1 July 2021,” Williams said in a statement.

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Williams explained that the city had worked to stabilise its finances through serious budget cuts on its operations, projects and overtime salaries. 

“Our ability to manage the deficit has come from implementing numerous cost containment measures, restricting unnecessary spending, stricter controls on overtime and refocusing the work of the institution so that we focus on our core deliverables.

“It has also required that we implement credit control actions against outstanding debtors who have run up bills with the city which they have not paid or made arrangements to address the debt. This has required us to use debt collection agencies and implement electricity cut offs.”

The mayor further said the city had also rolled out the installation of prepaid meters, which had assisted in ensuring a steady stream of income.