On Thursday, the Mayor of Tshwane’s ANC-led government will table an adjustment budget in the City Council. The Democratic Alliance (DA), as official opposition, has obtained a document used to brief the Mayor of the state of the City’s finances.
This briefing confirms three things:
- First, Tshwane does not have a funded budget and that the City’s financial distress has deepened despite attempts to hide the case flow situation;
- Second, at the end of this year the books of the City will reveal an enormous increase in unauthorised expenditure on water tankers; and
- Third, the City had chosen to pay salary increases instead of resolving water and electricity service outages.
The DA has written to the National Treasury to point out that the budget is not funded and a funding plan is necessary as well as requested an investigation into water tanker spending.
The backdated salary increases — which the City could have taken on review to the Labour Court — have widened the City’s deficit, the difference between what it aims to spend and can realistically collect.
The deficit has increased from R1,63 billion to R2,8 billion. A further R2,5 billion in creditors have been carried over from the previous financial year, effectively increasing the deficit to R5,3 billion.
If the City wants to plug this gap, it must drastically improve revenue collection. Revenue collection has deteriorated badly since the takeover of the ANC-led coalition, from 93% in 2024 to 82% by the end of 2025.
In order to improve the City’s balance sheet, and reduce the percentage of uncollected debt, the City proposes to write off upward of R8 billion of debt it regards as having prescribed.
While it is a sound practice to stop trying to collect debt which is uncollectible, it does not constitute an improvement in the City’s financial position.
One practice which the CFO does seem to have ended was to cover unauthorised expenditure on water tankers by allocating new money to pay old invoices in the adjustment budget.
No new money will be allocated to water tankers, but in the year-to-date R125 million has already been overspent on water tankers.
We expect the overspending to be much bigger, since this budget adjustment only covers half of the financial year.
All money that the City of Tshwane spends on water tankers from now until June will be declared unauthorised and investigated as such.
No wonder the ANC wants to get rid of the CFO.
The adjusted service delivery and budget implement plan (SDBIP) confirms that the City has downgraded its ambitions in line with reality. Finance targets have all been adjusted downward, while National Treasury Circular 88 indicators on improving water, electricity and roads have been removed from the SDBIP. Key infrastructure projects are also being defunded:
- R7 million is being taken away from the upgrade of the Sunderland Ridge Wastewater Treatment Plant;
- R12 million is being taken away from the upgrade of the Ekangala Wastewater Treatment Plant; and
- R7 million is being taken away from a project to upgrade telemetry in Tshwane reservoirs.
The DA will continue to fight against the financial mismanagement that is rampant within the City of Tshwane and is ready to come in with a plan to turn the situation around.