Covid-19 relief: R20bn could help alleviate municipalities’ strained finances

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Cape Town – More money is expected to be injected into several cash-strapped municipalities as President Cyril Ramaphosa allocated R20 billion to assist them during the coronavirus pandemic.

The funds are part of Ramaphosa’s national economic relief plan, which could alleviate the financial burden placed on municipalities during the lockdown to combat the spread of Covid-19.

On Tuesday, Ramaphosa presented a R500bn economic and social support package which could reboot the economy.

“Additional funding of R20bn will therefore be made available to municipalities for the provision of emergency water supply, increased sanitisation of public transport and facilities, and providing food and shelter for the homeless. Details will be announced in the adjustment budget tabled,” he said.

Mayco member for Finance and Deputy Mayor Ian Neilson said the City awaits details of the allocation of funds for water and sanitation made available to metros.

“The City will continue to do everything in its power to assist residents and businesses and it supports the resident wholeheartedly. The actual implementation of support will be key, and accountability will be required to ensure the support funds are not misappropriated,” he added.

Neilson said the crisis had a massive impact on the municipalities’ financial standing.

“The City has received lower than normal payment on its billing to customers during the first part of April 2020. The forced closure of our cash offices and the stopping of post office deliveries have contributed to this low payment rate.

“As many people will be receiving their salaries over the next week, we will only have a reasonable understanding of the impact by the end of the month. Most of the City’s basic and essential services are funded from rates and services income. About 72% per month comes from rates and services and are required to keep the City services going,” he said.

Neilson has said that the City would suffer a monthly loss of as much as R3bn in income as a result of the lockdown.

Opposition parties welcomed the additional funds.

ACDP caucus leader Grant Haskin said: “Municipalities need urgent guidance by National Treasury on the reprioritisation of draft budgets. In most cases, their draft 2020/21 budgets were drawn up in January/February, before Covid-19 in South Africa, meaning they are unresponsive to the depth of the current crises. Municipalities cannot approach the finalisation of their 2020/21 budget as if its business as usual. At least for the next financial year or more, ‘nice-to-have’ projects will have to be shelved or rephased.”

ANC caucus leader Xolani Sotashe added: “We are concerned about the money they will receive. We are concerned they will use it to campaign. The City has spent R7million on food parcels we don’t know about, so we hope they spend this money wisely and it is accounted for. We have learnt the hard way in Cape Town. They are using this to drive political agendas and we applaud the national government for providing relief.”

 

Cape Argus

By Marvin Charles

Credit: www.iol.co.za

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