City of Durban loses R34 billion to Covid-19

THE eThekwini Municipality has lost R34 billion in income due to Covid-19, which resulted in companies retrenching staff.

This was revealed by the municipal mayor Mxolisi Kaunda during a live 2021/22 policy budget held at Durban ICC today.

The devastating news comes as the Covid-19 pandemic had wreaked havoc on various local businesses, with many reporting revenue losses and others forced to change their business models.

Also read: Customers with debt urged to approach city for Covid-19 relief

Kaunda revealed 6000 companies were forced, by the pandemic, to close down, resulting in 300 000 job losses.  

He said the pandemic had been a wake-up call in how they view current economic models.

“In response, we initiated a bold and intensive Economic Recovery Plan focusing on attracting investment into the city. It is anticipated that it will take the eThekwini economy about two years to recover from the effects of the Covid-19 lockdown,” he said.

What’s more, the city had seen a drastic decrease in its revenue.

“As a result of Covid-19, our collection rate dropped from 95 per cent in March 2020 to 56 per cent in April 2020. We then introduced a debt relief programme that assisted businesses and residents, at the same time no interest was raised on arrears and this allowed for a favourable payment plan to settle arrears. When this relief programme comes to an end in June 2021, a new Covid-19 Relief Strategy will be put forward to respond to the third wave of the pandemic and to assist customers,” he said.

Also read: Covid-19 loan scheme extended by three months

Kaunda explained that to date, the relief programme has seen almost 20 000 customers take advantage of this intervention with an amount of R1.3 billion in arrears being secured for payment.

He announced that the city’s revenue collection rate has substantially improved to an average of 94,7 per cent as of 30 April 2021.

Kaunda stated: “We must celebrate this significant improvement in our revenue collection and we want to thank our residents for heeding our call to pay for municipal services.  Therefore, the budget we are tabling today is based on an average collection rate of 95 percent.”

Since Umgeni Water Board raised water tariff by 7 per cent, Kaunda said they have decided to increase the city’s water and sanitation tariff to 8.5 per cent.

“Property rates and refuse tariff increases have been kept to a historical low of 4.9 percent. The Eskom bulk tariff increase for electricity is 17.8 per cent, which has resulted in an increase of 14.59 per cent for electricity by the City.  This is the recommended increase for municipalities by the National Energy Regulator of South Africa (NERSA),” he said.

Kaunda added that they managed to strike a serious balancing act to ensure that the tariff increases remain affordable, considering the tough economic climate confronting everyone.

* Notice: Coronavirus reporting at Caxton Local Media aims to combat fake news

Dear reader, As your local news provider, we have the duty of keeping you factually informed on Covid-19 developments. As you may have noticed, mis- and disinformation (also known as “fake news”) is circulating online. Caxton Local Media is determined to filter through the masses of information doing the rounds and to separate truth from untruth in order to keep you adequately informed. Local newsrooms follow a strict pre-publication fact-checking protocol. A national task team has been established to assist in bringing you credible news reports on Covid-19. Readers with any comments or queries may contact National Group Editor Irma Green (irma@caxton.co.za) or Legal Adviser Helene Eloff (helene@caxton.co.za).

 You can also sign up for news alerts on Telegram. Send us a Telegram message (not an SMS) with your name and surname (ONLY) to 060 532 5532. 

For more from Northglen News follow us on Facebook or Twitter. You can also follow us on Instagram