Political parties in eThekwini were concerned about the financial state of the municipality after the mid-year budget and performance assessment report was discussed at the council meeting on Thursday. 

The report is for the period ended December 31, 2025. The eThekwini Finance Committee reported the actual operating revenue of 98% of the year-to-date budget, with a variance of -2%, and revenue generated sitting at 54%. 

The actual operating expenditure was reported as a percentage of the year-to-date budget figure of 92% with a variance of -8%, and the operating expenditure spent to date being 47% when compared to the original budget.

The capital expenditure was reported to be 84% of the budget, with a variance of -16%. The capital year-to-date spent was reported to be sitting at 31%, which was slightly higher when compared to the same period in the previous year (26%).

The committee highlighted the following points:

• The cost coverage ratio.   
• The creditors’ payment period is 50 days, against the benchmark of 30 days. 
• Outstanding creditors at December 2025 are R1.7 billion. The previous year was R222 million. 
• An increase of R549 million due to the collection of interest from arrear debts. 
• Stabilise the cash flow, with focus on spending on priorities; with a clear plan on cash preservation, enhancing revenue collection and responsible borrowing.
• There was a challenge in December 2025, for the payment of creditors because of the improvements in terms of the controls. Suppliers were requested to provide additional information to confirm that services were rendered.

Saul Basckin, ActionSA eThekwini councillor, said the figures were misleading and disconnected from residents’ lived reality.

He said the departments that actually keep the city running tell a very different story: finance 44%, and operations management 33%. He regarded both as the engine room of the municipality. 

“When finance and operations fail, the municipality fails, regardless of what an overall average suggests. We see this daily. Emergency service providers are not paid. Repairs are delayed or have never responded to. The municipality is operating with around 14 days’ cash on hand — that is not stability, it is a financial crisis, which ordinary residents are paying the price,” he said.

Jay Singh, an eThekwini United Independent Movement councillor, raised concerns about a 14-day cash crisis and creditor debt, which he said had a knock-on effect on Small, Medium, and Micro-Enterprises (SMMEs). 

“We are killing the very SMMEs we claim to support, and forcing larger contractors to inflate their prices just to cover the cost of waiting for us to pay. We are literally pouring half of our potential revenue into the ground with the water loss. We demand an Emergency Cash Preservation Plan. We collect money at the front door but lose it through a thousand cracks,” he said. 

DA Councillor Andre Beetge stated that the city was not meeting any benchmarks and that within the next month, the municipality will have to consider an adjustment budget, reflecting “savings” to redirect funds to other projects, when the reality is actually that funds will be re-prioritised, as there just isn’t enough to cover all the obligations.

“This appears to link directly with cash on hand and the city’s ability to engage contractors to keep the lights on and the water flowing from taps. This manifested into reality when unpaid plumbers attempted to break down the doors of Treasury’s Florence Mkhize Building in demand of payment for services rendered, earlier this week,” Beetge said. 

“Just how solvent is this municipality, or has the time come to admit that the process of administration has to unfold. Or is the objective to empty the coffers before the upcoming local government elections?” he asked. 

zainul.dawood@inl.co.za

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