Cape Town beats all other metros in financial management – Ratings Afrika

20 April 2016

As part of our commitment to being a well-run city, the City of Cape Town has prioritised prudent financial management as this leads to increased financial stability which attracts business and investment and in turn creates jobs.

We have put various controls in place to ensure that service delivery and good governance practices are accelerated across the organisation.

This has resulted in Cape Town achieving 12 unqualified audits and our third clean audit in the 2014/15 financial year, while international ratings agency Moody’s also recently commended the City of Cape Town’s ‘solid financial management’.

Last week, a Ratings Afrika report provided further confirmation of the City of Cape Town’s nation-leading spending on service delivery and good financial control.

Ratings Afrika has analysed the 2014/2015 financial statements of the 100 biggest municipalities.

The agency measured each municipality’s operating performance, liabilities management, budget practices and liquidity position to compile the Municipal Financial Stability Index (MFSI), marking municipalities out of 100.

Cape Town scored 75 – the highest out of all metros, with Johannesburg scoring 37, Ekurhuleni at 70, Tshwane with 24, Nelson Mandela Bay at 58, eThekwini scoring 50 and Buffalo City at 73.

The report found that the financial stability of four of the eight metros in South Africa is weak and that the two metros with the highest household income, Johannesburg and Tshwane, are the most troubled.

Indeed, this survey reveals a great disparity in that the two cities with the highest income per household scored drastically lower than Cape Town.

The agency stated that decisive political leadership is needed to correct the bad state of municipal finances and these leaders need to look at the interests of their residents and businesses rather than their own, root out corruption, and appoint competent managers with the necessary skills to implement budgetary processes and exercise financial discipline.

This is precisely the kind of action that has been taken in Cape Town and the results show, not only in our excellent financial management position, but in our work of service delivery.

We have maintained the highest level of service delivery and best financial management, while being the fastest growing city in the country.

These latest results are further proof that the City of Cape Town is the best metro in the country and, unlike other metros who have allowed their financial position to deteriorate, we will not rest on our laurels.

We will accelerate service delivery to the poorest households and maintain the highest level of cross-subsidisation to the poor, while managing our finances carefully and responsibly.

Sixty of the municipalities which scored below 50% are in financial trouble and, due to their financial constraints, service delivery is poor.

Ratings Afrika said that the best performing municipalities like Cape Town have well-entrenched financial policies and budgets based on sound long-term financial strategies while adhering to good budgetary practises, strict financial control and good revenue collection.

We have seen these results not only because we are accountable to the people who have elected us, but because we have a moral obligation to ensure that we spend public funding where it is meant to be spent.

We will continue our work of making this great city even greater. A city where we provide services to the poor and where we create the conditions to enable economic growth, attract investment and create jobs in building the opportunity city.

I am more committed than ever and, given the chance, we will intensify our efforts to make Cape Town the place where freedom, fairness and opportunity is realised.

I am further motivated by these results and look forward to working with residents and businesses to continue making progress possible, together. Laat ons vooruitgaan moontlik maak, tesame. Senza inkqubela yenzeke, Sisonke.

Issued by Executive Mayor Patricia de Lille, City of Cape Town, 20 April 2016