<\/p>\n
Johannesburg Mayor Dada Morero says there is no reason to panic about the city\u2019s finances, in what appears to be another display of confidence that the municipality will come back from the brink of collapse.<\/p>\n
Morero made the comments following National Treasury\u2019s stinging rebuke, which saw fiscal officials withholding the city\u2019s allocation of funds for July.<\/p>\n
Joburg is one of around 70 municipalities across the country that have been temporarily cut off from receiving their equitable share \u2013 to the tune of a total R13.5 billion.<\/p>\n
Read:\u00a0Godongwana withholds July funds to Jhb, 70 municipalities nationwide<\/p>\n
The release of the funds will depend on the errant municipalities\u2019 ability to submit plans to rectify debt issues or fruitless and wasteful expenditure.<\/p>\n
As a result,\u00a0City of Johannesburg (<\/span>CoJ) officials are facing a vote of no confidence from those who are facing the brunt of its weak finances and poor showmanship: residents and businesses.<\/p>\n While Morero admits there is room for improvement, he believes a recent update on the city\u2019s positive outlook by rating agency Moody\u2019s is a clear indication that it could still turn the tide sooner rather than later.<\/p>\n<\/blockquote>\n Moody\u2019s affirmed the South African commercial capital\u2019s Ba3 long-term issuer rating that had previously been on review for downgrade, according to a statement on 3 July.<\/p>\n \u201cWhilst there are particular challenges, there are also successes in the city,\u201d Morero said on Wednesday at a briefing to address a range of financial and service delivery issues.<\/p>\n \u201cIt\u2019s an indication of confidence from Moody\u2019s on our rating.\u201d<\/p>\n Read: Joburg sets sights on Moody\u2019s upgrade after positive outlook<\/p>\n He said over the coming months, the administration will strengthen the internal controls that govern its financial reporting, improve the credibility and monitoring of its budget process, and build up the city\u2019s cash reserves; the latter remains a pain point for the municipality, which accounts for approximately 15% of South Africa\u2019s GDP.<\/p>\n ADVERTISEMENT<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n Joburg is sitting on a cash\/cost coverage ratio of 12 days against the minimum safety benchmark stipulated by National Treasury of 30 to 90 days.<\/p>\n<\/blockquote>\n The funds amount to about R2.8 billion, which is half of the city\u2019s preferred target.<\/p>\n Tracking the city\u2019s litany of issues back to 2016, the ANC (which Morero belongs to) believes the blame for the current state of affairs should be shared among the political parties running the show.<\/p>\n While political pundits expect the 4 November local government elections to be punishing for parties like the ANC, Morero said his party shouldn\u2019t be dismissed yet.<\/p>\n \u201cThe trust in the ANC-led coalition will be demonstrated as we move along,\u201d he said.<\/p>\n The ANC recently shortlisted Morero and four others as candidates for the Johannesburg mayoral position.<\/p>\n Settling debt<\/strong><\/p>\n Of particular concern to\u00a0National\u00a0<\/span>Treasury is the ongoing challenge of municipal debt, with defaulting municipalities putting pressure on entities that provide it with key services.<\/p>\n By the 2024\/25 year-end, municipalities owed interest of R3.4 billion to Eskom and R1.2 billion to water boards.<\/p>\n Morero has committed to settling Joburg\u2019s share of the debt to Eskom and Rand Water by mid-July (presumably from sources of funds other than the\u00a0equitable share from National Treasury).<\/span><\/p>\n \u201cWe will be paying Eskom just around R1.4 billion as soon as we receive the cash, which will set us free from the debt process that we agreed with Eskom,\u201d he said.<\/p>\n<\/blockquote>\n \u201cWe really don\u2019t have issues with Rand Water, everything has been fine between the city and Rand Water. We will be paying them an amount of about R960 million next week or by the end of the month [July].\u201d<\/p>\n Last month, Eskom granted the CoJ a brief reprieve, agreeing to delay by 30 days its Promotion of Administrative Justice Act (Paja) process \u2013 the legal procedure Eskom must follow before it can cut electricity supply to the city.<\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n The delay was brokered by Electricity and Energy Minister Kgosientsho Ramokgopa in a last-ditch attempt to help manage the city\u2019s electricity bill following threats of power cuts.<\/p>\n Read: The Paja process was reinstated after the CoJ missed a 5 June deadline to pay its current account, despite having paid R1.2 billion toward its accounts since the process began.<\/p>\n The outcome of the public process is expected on 24 July.<\/p>\n \u2018Pay us\u2019\u00a0<\/strong><\/p>\n During Wednesday\u2019s briefing, Morero also hinted at plans to write to National Treasury to pressure government departments to pay monies owed to the city amid its own troubles to manage municipal finances.<\/p>\n Read: Treasury to give departments the municipal treatment<\/span><\/p>\n The debt collection drive is part of efforts to recoup more than R1.2 billion from provincial and some national departments, including health and education.<\/p>\n Treasury is not unaware of the issue.<\/p>\n It had already started the process of withholding transfers from provincial and national departments who don\u2019t pay their municipal bills.<\/p>\n<\/p><\/div>\n #Dont #write #Joburg #Morero<\/p>\n","protected":false},"excerpt":{"rendered":" Johannesburg Mayor Dada Morero says there is no reason to panic about the city\u2019s finances, in what appears to be another display of confidence that the municipality will come back… <\/p>\n","protected":false},"author":1,"featured_media":11297,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[1295,1487,12877,12876],"class_list":["post-11296","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-dont","tag-joburg","tag-morero","tag-write"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11296","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11296"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11296\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/11297"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11296"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11296"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11296"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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Solving Johannesburg\u2019s debt crisis is critical for both Eskom and CoJ
Johannesburg adds 700 managers as city struggles to pay bills
Johannesburg faces R2.1bn funding gap as its bills mount<\/p>\n