Municipalities spent R90.8bn by December - Treasury

Friday, February 26, 2010

Pretoria - South African municipalities had spent R90.8 billion of the R194.7 billion total adopted budget for 2009/10 as at the end of December last year.

This figure represents the end of the first six months of the municipal financial year.

National Treasury on Friday said municipalities, on the revenue side, had collected 49 percent or R102.9 billion of the R210.1 billion total revenue budget.

Treasury said of the six metropolitan municipalities in the country, 46.5 percent of their revenue had been collected at the end of the second quarter of the R128.9 billion adopted revenue budget.

The City of Johannesburg had collected the highest portion of its revenue at 52.5 percent followed by the Ekurhuleni Metro at 48.4 percent.

Coming to the adopted capital budget (of R23.4 billion) for the metropolitan municipalities, R9.7 billion had been spent as at 31 December 2009.

The municipality that had spent the most on this was the eThekwini Metro at R3.3 billion out of a R5.4 billion adopted capital budget. The metro is followed by the City of Johannesburg at R2.1 billion out R3.5 billion. The lowest capital budget spender was the Ekurhuleni Metro at 20.7 percent.

National consumer debts amounted to R56.3 billion as at the end of December last year (unaudited figures). Treasury said the metropolitan municipalities were owed a total of R31.3 billion as at 31 December 2009.

"This is an increase of R1.6 billion or 5.3 percent from the same period in the previous year," said Treasury.

Meanwhile consumer debts owing to secondary cities amounted to R11.5 billion as at 31 December 2009. This has increased by R1.3 billion from the corresponding period last year.

The Free State province was deemed to have the highest percentage of creditors outstanding for more than 90 days at 23 percent with the creditor age analysis showing that R8.2 billion is owed by municipalities. In the first quarter of 2009/10 municipalities owed R7.6 billion.

Metropolitan municipalities spend on average 2.8 percent of their total budgets on repairs and maintenance.

"These numbers are probably distorted by under-reporting of repairs and maintenance due to classification discrepancies when municipalities capture these expenditures.

"While the new budget formats begin to deal with this problem, it will only be fully resolved once there is a uniform Municipal Standard Chart of Accounts in place," said Treasury.

Treasury noted that given the economic slowdown, it anticipated that revenue collection would have begun to come under pressure.

"We anticipated that revenue collection would have begun to come under substantial pressure and consumer debts to show an increasing upward trend by the second quarter. At present municipal revenues are holding up fairly well," said Treasury.

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