Cape Town - South Africa's dire economic state is having an impact on the ability of the City of Cape Town to function and deliver services, says deputy mayor Ian Neilson.
In its assessment of the City’s 2019/2020 budget, the National Treasury highlighted “national economic factors such as ratings downgrades, state-owned entities (SOEs) failure, national policy uncertainty, power outages and the rising cost of living” as factors having a negative impact on City objectives.
Neilson said: “The National Treasury also states that the City’s spatial plans ‘reflect a clear logic for spatial transformation’; there is ‘a clear, compelling investment rationale and spatial logic’ and our ‘approach to prioritisation is sound’, but that we need to work harder towards implementing the programmes.”
It was pointed out that the City is being let down by SOEs and national departments. It is dealing with more crime and grime matters which redirected spending priorities.
Cape Town is experiencing congestion challenges as a result of the collapse of commuter rail services. This is also impacting the City's efforts to address spatial transformation and congestion.
The National Treasury found the City’s budget to be funded, credible and sustainable.
“The City acknowledges the report and will endeavour to do its best to strengthen the areas of weakness...
“As for the factors that are not wholly within our control, we urge that urgent direction is given about some of Cape Town’s biggest challenges being the implosion of passenger rail and its impact on commuters and our local economy, energy, water and crime, congestion and spatial transformation,” Neilson said.
The assessment indicates the City’s financial management and governance is sound, and it has a positive cash balance and adequate cost coverage within the norm of one to three months.
Robust debt collection has led to an improved collection rate from 92% in 2016/17 to 95% in 2017/18 and considered tariff affordability during the budget preparation process, to promote payment for services.
Sid Peimer, executive director of the Cape Chamber of Commerce and Industry, said: “All cities in Africa regardless of their performance attract people from rural areas, so all major urban centres are under pressure....
“The stress on existing infrastructure does present a challenge No part of the country has escaped the impact of Eskom’s failures, or the endemic corruption and lack of accountability of SOEs.”