Musina hopes to rid itself of Eskom debt in the next year

Date: 30 June 2022 By: Anton van Zyl

No mention was made of the auditor-general’s dismal view of the state of Musina Municipality’s finances during the annual budget meeting held at the Musina Show Grounds last Thursday. The mayor, Cllr Nkhanedzeni Godfrey Mawela, instead portrayed a dream that the municipality is on its way to becoming a “smart city”, marked by economic prosperity and jobs for all.

In June this year, the auditor-general (AG), Tsakani Maluleke, released her annual report on the state of the country’s municipalities. Only 16% of South Africa's 257 municipalities have been given a clean audit by the AG for the 2020-21 financial year. In the Limpopo Province, Musina was highlighted as one of three municipalities that have been in a “vulnerable financial position” for more than five years.

“This indicates that the provincial interventions deployed at these municipalities were ineffective. The municipalities could not recover money from consumers for services rendered. Together with ineffective budgetary management processes, this led to delays in paying creditors,” Maluleke states in her report.

Last Thursday, Mayor Mawela spent most of his time talking about projects that do not resort directly under the municipality, such as the proposed special economic zone and the SANRAL ring road. He only devoted one paragraph to probably the most serious problem the municipality faces, namely its massive Eskom debt.

Mawela said that Musina had owed Eskom R66,9 million in November last year. “During our seven months in office, we have managed to reduce the debt by R20 million,” he said. “We will definitely pay off the debt in the near future and start off on a clean slate,” he said.

How exactly the municipality intends settling its debt was not made clear. One of the problems the municipality battles with is consumer debt. “We are unable to provide some of the services due to the high number of consumer debtors, which stands at over R40 million. We are continuously engaging defaulting consumers to understand the value of paying for the services they get from the municipality,” he said.

Musina Municipality could once again not achieve a clean audit, but an “unqualified opinion” for 2020/21 seemed to be good enough. “We strongly believe that we will not regress when the audit for the 2021/2022 financial year starts around August this year,” Mawela said.

The budget approved by the Musina council last week totalled R446,04 million. The figures quoted by the mayor did not all make sense as some seemed to be out of context. The final approved budget document was also not available and the only reference that could be used was the draft budget summary as it appears on the municipality’s website.

The municipality’s operating budget appears to be around R413 million. The operating budget provides for regular expenses such as salaries. The capital budget, which provides for infrastructure projects, was set at R32,7 million.

As far as the operating budget is concerned, the council’s own income is supplemented by three national grants, namely the Equitable Share Grant (R193,79 million), an Extended Public Works Programme Grant (R1,39 million) and a Finance Management Grant (R3 million).

To make provision for additional expenses in the coming year, Musina has budgeted for several increases. Although the mayor stated that rates would increase by 5,6%, the draft budget states that waste-removal charges and assessment rates will rise by 5,7%. The electricity charges are expected to rise by 6,73%.

As has been the custom in the past, provision is made in the operating budget for the subsidising of indigent households.

The council’s salary bill is expected to rise by 8%. Provision is made for the filling of vacant posts. The newly elected councillors will seemingly also benefit from an 8% rise in salaries.

One of the expense items that the auditor-general has continuously pointed out as being a huge and escalating problem is the use of contractors to do work for municipalities. Musina has budgeted R38 million for this expense in the coming year. “Contracted services such as research and development have been identified as a cost-saving area for the Municipality,” it states in the draft budget summary. The biggest expenses are security services (R13,2 million) and management of the dumping site (R6,12 million).

The budget makes provision for R38 million that will come from “other sources”. The bulk of this money (R28 million) is expected to be derived from the selling of stands. “The plan is to sell 500 sites to DeBeers for the development of a new township and the rest will be sold to the community,” the budget document states.

As far as capital projects are concerned, the ones financed by a Municipal Infrastructure Grant are:

* Shakadza Multi-Purpose Centre (R12,1 million)
* Nancefield Ext 9 &10 paved road phase 2 (R7,8 million)
* Mabvete Community Hall (R8 million)
* Development of Mmberegeni graveyard (R8,5 million)
* Construction of Tshikudini Community Hall (R8 million)

The Rhino Ridge Park development will be funded from own resources. The council has budgeted to spend R157,4 million on the design and construction of 17km of internal streets and storm-water infrastructure. A further R19 million will be spent on the design and construction of electrical infrastructure. The security fence at the civic centre will be upgraded at a cost of R1,7 million.

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Anton van Zyl

Anton van Zyl has been with the Zoutpansberger and Limpopo Mirror since 1990. He graduated from the Rand Afrikaans University (now University of Johannesburg) and obtained a BA Communications degree. He is a founder member of the Association of Independent Publishers.

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