I was advised of the ‘State of local government finances and financial management Report as at 30 June 2017,’ issued by the National Treasury earlier today, which continues to affirm the financial health of the City.
The report provides a snapshot of the state of finances, and the state of financial management generally for municipalities across the country.
For the City of Johannesburg, the report confirmed that as at 30 June 2017, Johannesburg was not among those municipalities in financial distress.
This directly contradicts baseless fear mongering which has been peddled by members of the ANC during the same period.
Indeed, the ANC was invited to present evidence of the claims, on numerous occasions. To date, no such evidence has been forthcoming.
National Treasury also noted the City’s ability to cover monthly operational expenditure, as at 30 June 2017, which remained within the low risk category, with cash cover remaining between the accepted 1 to 3 month ranges.
Currently, the City’s cash coverage ratio is set at 45 days, performing better than National Treasury’s stipulated 30 days.
As matters stand, the City’s current ratio stands at 1:1, indicating that the City has sufficient current assets and cash to cover our current liabilities, in line with industry norms.
This said, the report equally notes that our inherited debtors’ books are still the largest of the metros, sitting at R17.1 billion. To address this, the City is currently implementing a number of revenue improvements which are sure to reduce this over the medium term.
Indeed, our debt to revenue ratio remains in line with National Treasury’s norm of 45%. Though there is yet much work to be done in improving the financial health of the City, today’s report from Treasury, alongside our current gains, assures me that the City is progressively moving in the right direction.