The financial health of the Ekurhuleni Metro was among the major issues which took centre stage as executive mayor Nkosindiphile Xhakaza delivered his maiden State of the City address on Tuesday April 30, 2024.

Like the other two Gauteng metros; Ekurhuleni has been marred by political instability and tight fiscal pressures as it battles with service delivery problems.

In the 2022/23 financial year, Ekurhuleni was one of only two metros in SA that received a clean audit outcome. A year later, it had lost its status, with its financial predicament seemingly deepening.

“We remain concerned about the state of our finances, mainly because we seem not to be collecting enough revenue. Our finances are also not aligned to our priorities.”

Last year the AG flagged concerns about Ekurhuleni’s irregular expenditure of more than R20-million and noted the city’s weak internal mechanisms on contract, procurement and supply chain management.

Commenting on the latest audit outcome the mayor admitted, “Indeed, there was a slight regression in this regard, which saw us dropping from a Clean Audit to an unqualified audit opinion.

Read more in Daily Maverick: Ekurhuleni loses clean audit status after attempt to oust mayor stalls again

“Be that as it may, it is the General-Auditor’s judgment that our municipality’s financial statements are fairly and appropriately presented, without any identified exceptions, and in compliance with generally accepted accounting principles…”

Xhakaza said his administration would endeavour to restore the clean audit outcome in a year’s time. “It is our resolve that those issues be resolved by the end of the current financial year so that we are on track for yet another clean audit. After all, we know how to get clean audits.”

In addition to a slightly negative audit outcome, credit agency Moody’s downgraded the metro’s ratings further into “junk” status in the wake of the worsening financial position.

The city has since received a slightly positive credit rating which was solicited from Global Credit Ratings (GCR) which Xhakaza said, “affirms our municipality’s national scale long-term and short-term issuer ratings at BBB(ZA) and A3(ZA), respectively.”

Other key priorities include:

Provision of quality and sustainable services to all residents 

Xhakaza said his administration would “pull out all the stops” to ensure that there is seamless delivery of services to the people of Ekurhuleni. Residents of Springs, Benoni, Kempton Park and Thembisa have expressed dissatisfaction with energy, water and sanitation services during the recent IDP/Budget consultation process.

In February 2024, Daily Maverick reported Ekurhuleni stood to lose more than R600-million in conditional grants and an instruction from National Treasury to submit written representations for poor expenditure.

Read more in Daily Maverick: Short-changed — National Treasury threatens to halt more than a billion rand to Gauteng metros

In terms of provision of electricity, Xhakaza claimed the city had electrified 97% of households, while the remaining 3% were receiving urgent attention — a claim that Daily Maverick had been unable to fact-check at the time of publishing.

The city will soon introduce a Khanyisa Mhlali programme aimed at a vast rollout of electrification projects throughout the city, in particular street lights maintenance and the rollout of high mast lights. Details of this programme would be shared in due course.

Entrepreneurship enhancement and township economic development

Among Xhakaza’s ambitious plans is focus on township supplier development, township gig economy and township business sites development in which, “township entrepreneurs shall be trained, and business regulations implemented through Business Act and Municipal Bylaws”.

This, according to Xhakaza, will see the city provide financial and training support to hair salons, last mile delivery, fresh produce street traders, consumer goods traders, electronics/ mobile phone repairers, clothing/textile manufacturers, agroprocessors, tuck-shops and spaza shops and car wash businesses.

Good and ethical governance  

“Madam Speaker, it is imperative that we prioritise the robust implementation of revenue enhancement and credit control while at the same time revising the incentives for consistent payment and discount consideration for settling outstanding debt for both business and residential,” Xhakaza said during his address.

“We shall intensify the Siyacima Manje Namhlanje credit control programme to solidify our fight against capable but non-paying customers — especially the Top 1,000 Companies.”

In addition to this, Xhakaza said they would eliminate erratic billing, which had become an ‘albatross for the city’. “We must move with speed when it comes to the implementation of smart digital billing — which means smart and credible billing. We continue to receive complaints about the interim billing which is also a leak of much-needed revenue for the city. The current status quo must end,” he said.

Employment opportunities and skilling 

The city intends to create 16,000 jobs and maximize the Youth Skills Development of 4,300 young people. “We are establishing the Ekurhuleni Skills and Bursary Fund in partnership with Seta and the private sector,” Xhakaza said. Part of the breakdown includes:

• 8,000 Expanded Public Works Programme work opportunities
• 1,000 Community members trained through Seta and Gauteng Provincial programmes; and
• 1,200 Community members provided with vocational skills training.

“Madam Speaker, next month we shall be unveiling the first 1,400 cohort of beneficiaries of this programme,” Xhakaza added. DM