Covid-19 sparks budget woes for City of Tshwane
The City of Tshwane is looking at huge budget shortfalls amid low revenue collections due to the Covid-19 pandemic.
In a report to parliament’s co-operative governance & traditional affairs’ portfolio committee the city said its 2020/21 budget, which is currently out for public comment, will have to be adjusted downwards.
This is as a result of projected revenue collection shortfalls as a number of residents and businesses are unable to pay the city due to economic hardships forced by the Covid-19 lockdown which kicked-off in March.
“ To accommodate the lower collection levels, the 2020/2021 expenditure budget will have to be adjusted downwards.
“With the additional Covid-19 costs, it would be extremely challenging, bearing in mind that the normal service delivery levels in all areas will have to be maintained,” reads the report.
It said that the city would have to implement cost containment measures.
“But these [measures] shouldn’t result in significant savings as they were already implemented in 2019/2020,” reads the report.
The report was presented by the team of administrators, led by Mpho Nawa, who are currently running the city since it was placed under administration early this year.
Rianda Kruger, one of the administrators who is tasked with dealing with “good finance management”, painted a bleak picture, saying the municipality’s debt collection levels had gone down.
“The slide just shows that our collection from March to April has gone down with almost a R1bn ... it’s necessary to just take cognisance that we are collecting even less. May wasn’t a great month either,” said Kruger while presenting the report.
“We are going to have to do a lot of cuts in our expenditure budget just to adjust downwards so that we can actually still pay what we still need to pay with the levels of income that we will have for 2021,” she added.
The report shows that the city was worried about the affect of additional expenditure caused by Covid-19 on the city’s ability to deliver on its mandate.
“Additional costs relating to food parcels and homeless plans are expected to amount to at least R850m. The City would need R290m per month to provide food parcels for 500,000 households (the projected number of households in need).
“This was not planned for, and the City thus requests funding to deal with the current year end deficit [and] deal with the 2020/2021 budget – the City cannot submit an unfunded budget, and currently due to additional Covid-19 costs and further loss of revenue, this will be the case,” reads the report.