Letter: Can turn EC municipalities around

THE article, “People rather pay for DStv than bills” (March 24), refers:

The poor state of the economy in the Eastern Cape is beginning to bite hard and is threatening the financial viability of municipalities with debt owed to municipalities up a staggering 45% or R2.146-billion when one compares December last year with December 2014. A massive total of R7.7-billion is now owed by consumers to municipalities in the Eastern Cape.

Government departments owe a whopping R392-million. This emerged from a quarterly report on the state of municipal budgets, tabled in a finance portfolio meeting in Bhisho.

Red lights are now flashing for municipalities. The situation can only worsen this year as consumers battle with rising interest rates, inflation and unemployment.

Given the tight fiscal space in which the province is operating, the provincial Treasury is unlikely to be able to meet the demands for bailout requests. We need to get our economy moving again and create jobs so the revenue base grows.

This is the only long-term solution to creating financially viable municipalities.

The Treasury needs to monitor the financial sustainability of municipalities very closely as some of them already have negative cash balances. It also needs to assist municipalities with revenue enhancement and cost-cutting strategies.

If we cut corruption and cadre deployment, and put the right people and systems in place we can turn local government around.