“There are risks to maintaining the expenditure ceiling over the medium term, which include the public service wage agreement and the financial position of several state-owned companies,” Nene told parliament during a Treasury presentation.
JOHANNESBURG - More than 40% of South African municipalities do not have enough money to carry out service delivery plans for the current financial year, Finance Minister Nhlanhla Nene revealed on Tuesday.
According to EWN, Nene in a written Parliamentary reply revealed that 112 municipalities have unfunded budgets.
The majority of municipalities come from Limpopo, followed by the Northern Cape and KwaZulu-Natal, the minister told MPs.
He further revealed that just 14 municipalities have approved financial recovery plans.
The Democratic Alliance's (DA) Kevin Mileham told the news site that it is evident that municipalities are either battling to collect revenue from ratepayers, have a revenue base that is not big enough, or are not adequately controlling their expenditure.
He further said: "The minister is obligated to intervene and sadly there's been a complete lack of intervention on the part of provinces and national executives of Cabinet to take the necessary steps to ensure financial stability in these municipalities.”
Earlier in the day, Nene told parliament that South Africa will struggle to stick to a promise to cut spending, which helped it avoid a damaging credit rating downgrade, if a stalemate over civil service wages is not resolved soon.
- BUSINESS REPORT ONLINE