Statement by GOOD National Chairperson, Sam Shabane
TSHWANE DOWNGRADE: LGE2021 MUST BEGIN TO FIX THE OLD PARTIES’ MESS
21 April 2021
The City of Tshwane has been mismanaged into the ground. It is running at a loss and global ratings agency, Moody’s, doesn’t see improvements on the horizon.
Several terms of incompetent and corrupt ANC leadership knocked the city to its knees, while a single term of DA mismanagement (under three different mayors) now threatens to put it out for the count.
Those who suffer most are the city’s poorer communities and more vulnerable citizens, who depend most on the basic services and essential dignity that functional municipalities are meant to provide.
Announcing its downgrading of the City’s rating to B1with a negative outlook, this week – on the same day that the President announced the date for local government election – the agency said the city’s negative operating results in financial year 2020 were likely to persist in the medium to long term.
Ratings agencies generally couch their decisions in diplomatic financial speak.
“The significant decline in operating performance in FY2020 was driven by the low demand in service charges exacerbated by the coronavirus pandemic leading to flat operating revenues. At the same time, operating expenditure grew by 16% according to the 2020 unaudited financial statements, reflecting a significant increase in salary costs and higher bad debt provisions.
“In our view, the substantial salary adjustments in FY2020, which followed protests from municipal employees, underscore some weaknesses in the city’s budget planning, in particular the lack of management response in phasing these additional costs in the past three years,” Moody’s said.
What all that means is that the capital is effectively broke. It is haemorrhaging money on unsustainable salaries, battling to pay its debts – and borrowing more money will become increasingly expensive.
This year’s local government election is arguably the most important in South Africa’s history. Voters will determine whether we continue our race to the bottom, or begin to hold the old parties to a higher form of account.
ENDS…