Soaring rates in big metros

2013-08-11 10:00

Residents struggle to break even as monthly expenses grow.

Bad news for ratepayers in Pretoria and East London: you’re paying more for municipal services than your counterparts in other metros.

Parliament heard this week how the screws are tightening for ratepayers in South Africa’s nine largest cities.

The economic downturn, climate change and sociopolitical instability have put unforeseen pressure on cities where government subsidies are not keeping pace.

The SA Cities Network revealed this precarious state of affairs in Parliament on Wednesday with its latest financial report on the eight metropolitan municipalities and ­Pietermaritzburg as the ninth­largest city.

For a basic service package ­(water, electricity, rates, sewerage, refuse removal and roads), the Tshwane and Buffalo City metros charge nearly one-fifth of a household’s monthly income.

Although Tshwane residents have the highest average household income (R19?173) of the nine cities, Buffalo City’s is the lowest (R10?300), and households there have to battle harder to survive.

Sithole Mbanga, chief executive of the SA Cities Network, said the financial report indicated that services in cities were becoming increasingly unaffordable.

“The economy is not growing enough – people have less money in their pockets and even businesses are starting to complain about basic service delivery,” he said.

But more people are moving to the cities, increasing the demand for service delivery. Meanwhile, household debt is rising and ­“services are becoming more ­unaffordable”.

Mbanga said if the situation continued like this, cities would degenerate into “centres of poverty” because municipalities receive too little money from the government.

“How are we still supposed to ­finance our noble ideals, like the green economy and a reduction of gas emissions? We are stuck between the devil and the deep blue sea,” he said.

Ian Neilson, deputy mayor of Cape Town and an SA Cities Network board member, said half of the country’s 52?million people live and work in cities. He said Cape Town’s population alone increased by 30% over the past 10 years.

Cape Town collects R20?billion in service fees and receives R4?billion in subsidies from the national ­government.

Meanwhile, Cape Town’s economy generates R100?billion annually, “of which we don’t see much”, ­Neilson said.

He said the national government should transfer its focus from rural development to the needs of urbanisation.

“We don’t need small housing boxes at the edges of cities, but higher blocks of flats in our cities,” he said.

Subesh Pillay, a member of the mayor’s committee for economic development in Tshwane, said cities must eliminate management problems such as poor audits and corruption so that the focus shifts to economic prosperity instead.

“However, the problem is that even if we do everything right, we still have a financing gap. We must increase our revenue base, but then we will have to expand our infrastructure, especially where there are economic opportunities,” he said.

Soaring rates in big metros

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.