Author: BUSINESS INSIDER
11 July 2020
Steep new tariff hikes for Joburg, Tshwane and other cities, while Cape Town faces less pain
South Africans are facing steep municipal tariff hikes for the next year, as some of the country’s large cities struggle to balance their books.
In April, South African consumer inflation was 3% – the lowest rate since June 2005 – while tariffs in some areas will be increased by double that rate.
The City of Johannesburg – which this week narrowly avoided being put under administration – became the latest to approve its budget for the next year.
Joburg’s Jolidee Matongo, who heads the finance portfolio in the mayoral committee, says the budget had the tough balancing act of trying to give relief to residents, while keeping the city financially afloat during the crisis.
Property rate tariffs will increase by 4%, water tariffs by 6.6% and electricity by 6.23%. Sanitation will go up by 6.6% and refuse delivery by 5.2%. These rates are considerably lower than initial plans – which included an electricity tariff hike of almost 9%. The new tariffs will go into effect from the start of this month.
Here’s how its rate hikes compare to other major cities:
Earlier this week, Ekurhuleni’s Nkosindiphile Xhakaza, who heads the finance portfolio for the city, said the city will lose at least R1.2 billion in revenue due to the effects of Covid-19.
The city announced a painful 15% increase in water rates, as well as a 11% increase in sanitation. Electricity tariffs will increase between 6.23% and 8%. The good news is that property rates and refuse removal haven’t been hiked.
Electricity tariffs will increase by 6.22%, refuse removal by 6% and sanitation by 6.6%. Water tariffs will be hiked by a painful 9%.
The city has been embroiled in court battles since being placed under administration by Gauteng Premier David Makhura earlier this year.
Residents of Cape Town have it slightly better, with a smaller increase in rates compared to other big cities. According to the city’s budget, property rates increased by 3.9%, while refuse rates rose by 3.5%, water and sanitation went up by 4.5% and electricity by 4.8%.
“Good governance is enabling us to absorb the estimated R2 billion Covid-19 impact on our budget, without passing this burden onto residents. That’s why our annual rates increases are the lowest of all metros who’ve tabled budgets so far,” claimed Mayor Dan Plato.
Last month, eThekwini mayor Mxolisi Kaunda announced that the city’s total budget for the 2020/2021 financial year was R49 billion – a painful fall from R52.3 billion the previous financial year.
According to the budget, water tariffs will increase by a significant 9.5%, and refuse removal by 6.4%. Electricity tariffs will increase by 6.22%. Property rates will go up by 4.9%.
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