The Nelson Mandela Bay Municipality has made a major breakthrough in its efforts to ensure government departments keep their accounts up to date with over R54 million having been paid by the third quarter of the current financial year. This includes the settlement of R31 million by the Department of Economic Development and Environmental Affairs (DEDEA) for the building of the now successful Nelson Mandela Bay Logistics Park in Uitenhage.
This will feature in a third quarter report to be presented to the first Budget and Treasury standing committee meeting and to a full sitting of council, thereafter, as guided by the Municipal Finance Management Act.
The entire government debt at the municipality looks different than it did when the Executive Mayor, Cllr. Zanoxolo Wayile and officials started engaging the Premier, MEC’s and senior provincial officials in the province almost six months ago.
As at the end of May 2011, government debt was 2.41% of the total owed to the municipality, a decrease of 5.38% compared to July last year when the municipality first experienced cashflow challenges. Last month, government paid R6m more than expected and currently owes R22 million.
“We are pleased that we have made some inroads in this regard and we hope to build from this achievement going forward. Our commitment is to increase the revenue collection rate of the municipality even further. We have placed significant emphasis also on consumer and business debt going forward, said Portfolio Councilor for Budget and Treasury, Cllr. Balu Naran.
“Given the tight balancing act we have to do as the Nelson Mandela Bay Municipality at the moment – in terms of which we need to get more funds for infrastructure and operational projects in a way that is cost-effective to residents and businesses – the need for creativity and vigilance is more pressing,” added Cllr. Naran.
“We do not only need to have stricter collection initiatives but we also need to be more creative in how we increase the revenue base of the municipality. That is why the important work around the financial recovery plan is going to be strengthened going forward,” said Cllr. Naran.
“We are also going to make an aggressive approach in accessing more grant funding at a national level in this coming financial year and focus will be on achieving key priorities such as service delivery, job creation, elimination of the bucket system and youth development, among others. Employment creation is critical when it comes to increasing our revenue base in that more people will afford to pay for municipal services,” he said.
Meanwhile, the Nelson Mandela Bay Municipality’s vigilance in revenue collection has paid off in recent months with the municipality having achieved its revised target for the last two quarters, albeit under tough conditions.
The current collection rate has been used to project potential income for the oncoming financial year. The collection rate for May 2011 was 94.77% against a target 93.75%.
Although it is a clear indication the city is likely to achieve this rate if the necessary measures are put in place, the city we will closely monitor potential changes in the macro-economic outlook, particularly with regards to interest rates and inflation.
NMB Communications
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