South Africa's biggest cities in better financial shape: report

Seven of out nine of South Africa's largest municipalities received unqualified audits in 2014, the South African Cities Network said on Wednesday evening at the launch of its City Finance Network 2015 report.

The survey polled South Africa's biggest municipalities to assesses their financial fitness. It found that they have shown consistent improvement in financial management over the past 15 years.

The assessed municipalities are Johannesburg, Cape Town, eThekwini, Ekurhuleni, Tshwane, Nelson Mandela, Buffalo City, Msunduzi and Mangaung. Nelson Mandela and Buffalo City received qualified audits.

In 2014, the combined budget of the nine cities was R184 billion. Between 2009 and 2013, the municipalities spent a combined R117 billion on capital-related projects. "This is a significant level of investment and emphasises the important role the cities play in driving economic development," the South African Cities Network said in a statement.

The assessed cities have a combined population of 22 million, which is 40% of South Africa's total population.

However, the report noted that the municipalities were under extreme pressure from historical backlogs, increasing urbanisation and constraints in the current municipal revenue models.

"Cities have been unable to respond fast enough to the ever growing pressures from their citizens, many of whom are poor and with limited access to resources," South African Cities Network CEO Sithole Mbanga said.

Speaking on the sidelines of the launch of the report in Johannesburg, South African Cities Network researcher Geoff Bickford said the consistent improvement in the cities' financial management was due to a number of factors. These, Bickford said, included the municipalities' concerted efforts to manage their finances better.

This was partly due to their desire for sound management systems so that they could leverage funds on the capital markets and related sources of funding.

"The infrastructure backlog is still there but we can clearly see that municipalities are now spending more on public transport infrastructure, social housing programmes, roads and community facilities such and parks," Bickford said.

Source: Fin24