City of Ekurhuleni coffers indicate improvement

The Citizen

07-05-2025

City of Ekurhuleni MMC of Finance Jongizizwe Dlabathi said the city is on the path to financial recovery, with encouraging signs of progress in revenue collection, expenditure control, and cash flow management.
However, while significant strides have been made, he acknowledges that the road to full financial health is far from complete.
A recently released report reflecting the city's financial performance for the third quarter of the 2024/25 financial year signals a shift from past fiscal instability toward improved governance and accountability.
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'When I assumed responsibility for leadership and oversight of the finance portfolio, the city was facing a concerning financial trajectory, exemplified by a staggering R3.1 billion under-collection in electricity sales during the 2023/24 financial year.
'This was due to a lack of strategic focus. Our primary objective has since been to drive financial recovery by rebuilding effective revenue systems and enhancing operational efficiency,' said Dlabathi.
Encouraging revenue gains
One of the most notable developments is the improved revenue collection in the electricity sector, which had previously suffered major shortfalls.
The city reduced its electricity revenue under-collection from R2 billion in the first quarter to R417 million by the third quarter.
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This improvement is closely linked to increased meter reading accuracy, which rose from 76.2% to 85.9%.
Efforts to curtail interim billing—especially among large power users—have also yielded results.
The number of interim electricity readings dropped from 1904 to just over 1000, demonstrating a commitment to accurate, accountable billing practices.
Financial discipline paying off
On the expenditure front, the city has reinforced financial discipline.
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Operational spending dropped by 19% in the third quarter, with no overspending on bulk electricity purchases or consumables.
While overtime spending remains an area of concern, a council resolution is in place to reduce these costs by half going forward.
The city has also managed to stabilise its cash flow.
Cash on hand increased to 22 days—double what it was in the first quarter—reducing the city's reliance on overdraft facilities.
All bulk service invoices, totalling R3.1 billion, have been settled, and repayment plans with Eskom and Rand Water are progressing without default.
Addressing long-term debt
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Dlabathi said that despite the improvements, the city faces a daunting debt landscape.
Outstanding consumer debt has reached R30.9 billion, with households responsible for over 76% of the amount owed.
In response, the city has intensified its credit control campaigns and launched the Debt Relief and Rehabilitation Incentive Programme, which offers up to 70% write-offs for qualifying historic debt.
'To date, more than 6,300 residents have applied for the programme—an encouraging sign that the city's message is resonating,' expressed Dlabathi.
Restoring trust and accountability
The city's leadership has attributed much of the past fiscal decline to strategic missteps, such as the misallocation of the meter reading function, which was previously moved from the Energy Department to ICT.
This decision has since been reversed to restore accountability and operational integrity.
Independent forensic investigations are ongoing into allegations of account manipulation and meter tampering—issues that had previously eroded public trust and undermined revenue.
Additionally, capital spending, currently at just over 50% of the total capital budget, will be bolstered by increasing the maintenance allocation in the 2025/26 draft budget.
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Call to action
'While financial indicators are stabilising, the city is calling on all residents, businesses, and government departments to meet their payment obligations.
'Non-payment undermines our ability to deliver services. Sustainable service delivery relies on consistent revenue collection,' said Dlabathi.
He said the city is not out of the woods yet, but the tide is changing course.
'The city's financial picture is improving, with key metrics showing positive movement.
'Yet, the task ahead remains substantial. Continued fiscal discipline, enhanced service delivery, and community co-operation will be critical in ensuring the city's long-term financial resilience,' he added.
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Executive endorsement
Executive Mayor Nkosindiphile Xhakaza praised Dlabathi for the work he has been doing.
'These are not just numbers; they are evidence that the city's recovery is real, governance is being restored, and trust is being earned through action—not demanded by title.
'We are under no illusions about the scale of the work ahead, but the direction is right and the momentum is building,' said the mayor.
He said his executive is committed to taking the city back to its former glory.
'We remain resolute, energised, and focused, because the people of Ekurhuleni deserve nothing less—and because the renewal of our public service must be more than a promise; it must be a lived reality in every department, every ward, every day,' said Xhakaza.
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