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20 Years of Freedom and Democracy
R52.3 billion draft budget seeks to create stability
The 2021/2022 Medium Term Revenue Expenditure Framework tabled by eThekwini Mayor Councillor Mxolisi Kaunda, at a Full Council sitting on 31 March at the Inkosi Albert Luthuli International Convention Centre seeks to give hope and create stability amid the adversity of Covid-19.
The consolidated draft budget of R52.3 billion consists of an operational budget of R47 billion and a capital budget of R5.3 billion. The budget is prepared under various considerations including the national economy being under major strain and stress, low economic growth and high unemployment.
Statistics indicate that the Municipality has lost R34 billion across all sectors of the economy, with over 6 000 companies forced to close, resulting in 300 000 job losses. In response, the City initiated a bold and intensive Economic Recovery Plan (ERP) focusing on attracting investment into the City.
The ongoing investment in catalytic projects gives hope to turn the economy around and secure a better life for future generations. It is important to note that eThekwini is the first Metro in the country to develop an economic recovery plan that responds to the economic crisis occasioned by Covid-19. It is through this economic recovery plan that the City was able to attract over R3.4 billion of Foreign Direct Investment in the 3rd quarter.
It is anticipated that it will take the eThekwini economy about two years to recover from the Covid-19 lockdown and the City’s leadership is confident that the acceleration of the implementation of the ERP will improve economic growth.
The economic outlook also gives the City’s leadership hope as the projected global economic growth for 2021 is 5.5% whilst the South African economy is expected to rebound by 3.3% following a 7.2% contraction in 2020.
Notwithstanding the impact of Covid-19 and the current state of the economy, tariff increases for 2021/2022 will be at an all-time low, as compared to the past six years. The tariff increases are mainly due to the bulk tariff increases by Eskom and the Umgeni Water Board which are all above inflation and out of the control of the City. In addition, the City had to make provision for a Consumer Price Index related increase in salaries.
Despite all the challenges, increases are kept at affordable levels considering the tough economic climate facing residents and businesses.
Property rates and refuse tariff increases have been kept to a historical low of 4.9%. This once again demonstrate that the City sympathizes with the plight of struggling residents.
The water  and sanitation tariff increase is 8.5% for both residential and business due to the Umgeni Water Board increase of 7%.
The Eskom bulk tariff increase for electricity is 17.8% which has resulted in an increase of 14.9% for electricity by the City and which is the recommended increase for municipalities by the National Energy Regulator of South Africa.
The draft Budget will be consulted regionally together with the draft Annual Report, the draft Integrated Development Plan and the draft Spatial Development Framework starting in April. Consultation will also be held through various digital media platforms.
The deadline for submissions is 15 May 2021 and the final budget will be adopted at the end of May 2021.

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