Tshwane's financial turnaround signals hope for sustainable recovery
The Tshwane metro has received a welcome vote of confidence from Global Credit Ratings (GCR), which has affirmed the metro's unsolicited long-term rating while revising its outlook from Stable to Positive.
This follows sustained progress in the municipal fiscal management, particularly in tackling long-standing liquidity constraints.
The revised outlook comes amid signs of recovery, marked by an operating surplus of R2.1-billion for the financial year ending June 30, 2024, up from R1.3-billion the previous year.
GCR further noted an improvement in liquidity, with year-end cash balances doubling from R1-billion in 2023 to R2-billion in 2024.
According to the GCR, much of this is credited to the reclassification of highly liquid investments and stricter spending controls.
Deputy Mayor Eugene Modise welcomed the rating revision.
He said it reflected the metro's commitment to transparent, disciplined governance.
'This improved outlook is not just a credit rating; it's a reflection of our commitment to rebuilding the financial health of our city,' Modise said.
'Through strategic debt reduction, improved billing, and firm expenditure controls, we are gradually restoring confidence in our administration.'
The rating agency highlighted key contributing factors, including improved billing accuracy, moderate tariff increases, and stronger interest collection from outstanding debtors.
Notably, the metro has also made strides in addressing its debt with Eskom, reducing the total from R6.7-billion in November 2024 to R5.6-billion by March 2025.
Modise added that Tshwane's financial progress will directly benefit residents.
'A stronger financial foundation means we can better deliver on our promise of reliable services, responsive governance, and critical infrastructure investment,' he said.
'We remain focused on ensuring every rand is spent wisely and transparently.'
GCR acknowledged ongoing challenges, such as the need for continued improvements in cash flow and long-term debt management.
Modise said the positive shift in outlook opens up investment opportunities and improves the metro's fiscal credibility in the eyes of national and international stakeholders.
'A positive rating outlook also improves investor confidence, potentially drawing new funding and partnerships into the metro's development plans, particularly around service infrastructure and economic upliftment in underserved communities,' he said.
Financial experts note that the metro's ability to secure a fully funded budget and adhere to repayment plans demonstrates a significant step toward long-term sustainability.
'These developments are not just about numbers,' said Modise.
'They are about restoring the greatness of our city through diligent service delivery, efficient resource management, and collaboration with the people of Tshwane.'
Modise insisted that continued execution of its financial recovery strategy is essential.
He said the focus will remain on maintaining liquidity stability, enhancing revenue collection, and improving service delivery through better governance.
ALSO READ: Sinoville residents reclaim their street and battle illegal squatters
Do you have more information about the story?
Please send us an email to bennittb@rekord.co.za or phone us on 083 625 4114.
For free breaking and community news, visit Rekord's websites: Rekord East
For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok.
At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Citizen
2 hours ago
- The Citizen
Are you one of the almost 16% who can afford a home loan over R1.3 million?
The question is not only if you can afford a home loan but if you can afford all the other expenses of owning a property. Recent research by an independent economist reveals that less than 16% of South Africans can genuinely afford homes priced above R1.3 million, underscoring a growing disparity between loan approvals and actual affordability. This raises questions about the financial sustainability of homeownership for the average buyer, Henri Le Grange, certified financial planner at Old Mutual Personal Finance, says. 'Qualifying for a bank loan does not necessarily mean you can afford all the costs that come with owning a home. 'The affordability gap often arises because banks assess loan eligibility primarily based on income thresholds, without considering your broader financial plan.' Le Grange says banks typically evaluate affordability based not only on gross income but also on disposable income, net income and previous monthly expenses. 'However, they consider past data and may not account for additional costs that come with homeownership, such as maintenance, insurance, or the impact of interest rate changes. ALSO READ: More SA consumers battling to pay their home loans and credit cards – report Some people get home loans but cannot afford true repayment 'As a result, I have seen customers approved for loans that exceed their true repayment capacity, threatening their financial well-being. This disconnect highlights the importance of seeking professional advice before buying a home.' Research by Izak Odendaal, Investment Strategist at Old Mutual Wealth, highlights key reasons why owning a home remains out of reach for many South Africans: stagnant wages, rising inflation and higher interest rates. 'South Africa's high interest rates and increasing property prices have made homeownership increasingly difficult. 'Many prospective buyers have been locked out of the market due to these combined factors, resulting in record-low affordability levels in the housing sector. 'Buying a home is one of the biggest financial decisions you will ever make, and it is easy to underestimate the true cost of ownership. 'Many customers also overlook the ongoing costs tied to homeownership, such as maintenance, insurance, property taxes and utilities, all expenses that can place additional strain on household budgets over time.' ALSO READ: South Africans cannot afford their homes but also can't afford to sell them Financial adviser can help look at your financial long-term plan However, he says that a financial adviser can help customers look beyond simply qualifying for a loan and ensure they are financially prepared for the long term. 'Many customers focus only on whether they can afford the loan repayment, often neglecting their long-term goals. It is not just about paying the bond. You must plan effectively to secure your long-term financial well-being.' Le Grange says working with a financial adviser helps you to create a realistic budget and prepare for upfront as well as long-term costs. 'A solid financial plan ensures you are ready for the responsibilities that come with homeownership. The goal is to help customers avoid borrowing more than they can manage and stay financially secure in the future.' Le Grange encourages consumers to take these practical steps to check if they can afford a home loan before committing to one: #1: Prepare for ongoing and unexpected costs: When you buy a home, do not just budget for the deposit and monthly home loan payments. Ensure you are ready for other costs, such as repairs, maintenance and higher utility bills. There are also transfer duty, conveyancing fees and bond registration costs, which consumers often overlook. These costs can arise unexpectedly, and therefore it is important to set aside extra money to cover these expenses and avoid financial strain. ALSO READ: Thinking of buying your first home, here are five key issues to consider #2: Test your ability to make home loan repayments: Before committing to a home loan, try putting aside the amount you would pay each month into a savings account. This will help you to see if you can afford the repayment comfortably and, if necessary, adjust your spending habits to make sure you are ready for the commitment. #3: Think about changes in interest rates: Interest rates can change, which means your home loan repayments may increase in the future. It is a good idea to think about how a rate increase could affect your budget and make sure you are in a position to handle any changes to your repayment amount. #4: Choose a loan term that fits your budget: When you take out a home loan, think about how much time you want to pay it off. A shorter loan term will mean higher monthly payments, but you will pay less interest overall. A longer loan term can lower your payments, but you will pay more interest in the long run. Choose a loan term that works for your budget and future needs. ALSO READ: How to finance your home loan if you do not have a regular income #5: Speak with a financial adviser and have a financial plan in place A financial adviser can help you consider your overall financial situation and create a plan that works for your short-term and long-term goals. They can also highlight any risks or hidden costs and suggest the best strategy for managing your home loan while keeping your finances healthy. In a challenging economic environment, affordability and financial resilience have never been more important, Le Grange says. 'Now more than ever, making informed financial decisions is key to building a secure future. Speaking to a trusted financial adviser can help to ensure your choices support both your immediate needs and long-term goals.'
eNCA
15 hours ago
- eNCA
Project to extend dam on schedule
JOHANNESBURG - Work is underway to expand the Clanwilliam Dam, with completion set for 2028. Water Minister Pemmy Majodina says her department will seek approval for extended working hours to stay on schedule. The R5.7 billion project will triple the dam's capacity. Construction teams are working on the expansion of the Clanwilliam Dam to ensure they meet the project's 2028 completion deadline. Water and Sanitation Minister Pemmy Majodina announced that the department will seek permission to extend overtime working hours to achieve their targets. During her visit to the site, Majodina said that she plans to monitor progress by visiting every three months. The R5.7-billion project will triple the dam's water capacity. Located on the Olifants River, the Clanwilliam Dam serves as a vital water source for the region's farmers, municipalities, and businesses. It currently holds 123 million cubic meters of water. The mega project was originally set for completion in 2018, but delays have pushed the date back to 2028. Officials have stressed the importance of meeting this deadline. Local leaders have underscored the crucial role the Clanwilliam Dam plays in the local economy, saying the completion of the upgrades will further accelerate the rollout of hydro-energy projects planned for the west coast corridor and will also bolster the region's agricultural sector.
Mail & Guardian
a day ago
- Mail & Guardian
South Africa must revive its industrial ambitions
Neglecting existing infrastructure generates higher long-term costs. South Africa's industrial decline is accelerating. State-owned enterprises that once drove economic transformation now epitomise institutional failure. Eskom's power cuts cripple manufacturing. Transnet's rail network deteriorates while ports struggle with backlogs. The Industrial Development Corporation, established to finance industrialisation, limps along with a compromised balance sheet. This infrastructure was built on the vision of Jan Smuts, prime minister from 1919 to 1924 and 1939 to 1948. While his commitment to racial segregation was morally reprehensible, his approach to economic development offers lessons for today's policymakers grappling with sluggish growth and persistent inequality. Smuts understood that South Africa needed to transcend its role as a commodity supplier to Britain's industrial economy. His developmental state model, combining strategic state investment, international partnerships and technocratic competence, transformed the country from a mining enclave into Africa's most sophisticated industrial economy. The foundations he laid endured for decades. The Electricity Supply Commission (later Eskom) provided cheap power that enabled large-scale manufacturing. The Iron and Steel Corporation (Iscor) supplied essential inputs for further industrialisation. His successors built on these foundations, establishing Sasol for synthetic fuels and the Council for Scientific and Industrial Research. Today, these institutions are shadows of their former selves. More troubling, the country appears to have lost the capacity for the long-term thinking that created them. South Africa's economic performance tells a sobering story. Growth has averaged just 0.8% annually over the past five years, well below the rate needed to reduce unemployment or meaningfully tackle poverty. The Gini coefficient, measuring income The benefits of black economic empowerment (BEE) policies have accrued primarily to political and economic elites, while the rest remain excluded from meaningful economic participation. The debate over the benefits of BEE has resurfaced, particularly concerning its mechanisms for wealth distribution. This has been highlighted by the recent scepticism surrounding the potential introduction of Starlink to South Africa, with concerns about exceptions to BEE compliance. Nonetheless, it is undisputed that, as a result of transformative Moreover, the state capture scandal, where politically connected individuals systematically looted public resources, represents the nadir of this failure, which has been accounted for by the collapse of Transnet and Eskom, the consequences of which are signified by inefficiencies thereafter. Despite the Zondo state capture commission spending more than R1 billion investigating the theft, many implicated figures retain positions of influence. Why do voters continue to elect leaders who have demonstrably failed them? The answer lies in how persistent unemployment, poverty and inequality make populations vulnerable to manipulation by the very politicians who created these conditions. The contrast with Smuts's approach is stark. He prioritised competence over patronage, choosing Hendrik Johannes van der Bijl, a German-educated engineer with US business experience to integrate the country's fragmented electricity supply. Van der Bijl's technical expertise, combined with political backing, enabled the creation of a power system that underpinned decades of industrial growth. Today's leaders talk about infrastructure development but have forgotten a crucial lesson: maintenance matters more than new construction. Neglecting existing infrastructure generates higher long-term costs than building new capacity. Johannesburg's collapsing central business district exemplifies this short-sightedness. Years of deferred maintenance have created a crisis that will cost far more to resolve than it would have cost to prevent. The rot runs deeper than poor maintenance. It reflects a broader failure of vision and leadership. Where Smuts aligned South Africa with international partners to attract investment and expertise, contemporary leaders often prioritise political survival over economic transformation. South Africa does not need to resurrect Smuts's racial ideology; his vision of white supremacy was both morally bankrupt and economically counterproductive. But it needs his approach to state-led development, clear vision, international partnerships, infrastructure investment and, above all, competence in execution. The formation of a government of national unity after the 2024 elections suggests political leaders recognise the scale of the crisis. The question is whether they possess the vision and competence to address it. As Smuts understood, South Africa's prosperity depends on reliable electricity, efficient transport and industrial capacity. These foundations are crumbling. Without urgent action to rebuild them, the country risks becoming a case study in how great institutions can be destroyed by poor leadership. The blueprint for revival exists in South Africa's own history. The question is whether anyone has the courage to follow it. Ashley Nyiko Mabasa holds master's in economic and labour sociology focused on energy policies and master's in public policy and governance focused on data governance, and is co-chairperson of the Brics Youth Council.
