Municipalities' financial management at risk says GCR
14 Nov 2012 14:37
The high number of vacancies or instability at a senior management level within some of South Africa's municipalities poses a risk to the financial and operational management of those municipalities‚ Global Credit Ratings (GCR) head analyst for the municipal sector Marc Joffe said on Wednesday (14 November).
Joffe said he expected operational and financial challenges facing South African municipalities to persist in future despite the notable progress in the roll-out of basic services and infrastructural developments.
The challenges were worsened by increasing population levels and urbanisation‚ specifically in metropolitan areas and secondary cities.
Official figures showed that economic hubs such as Gauteng saw an increase in inhabitants over the past few years. Gauteng is South Africa's most populous province - home to almost a quarter (12.3m) of the 52m people living in the country.
"These challenges have been aggravated of late by ongoing concerns facing the country‚ particularly surrounding economic policies‚ a rise in the number and intensity of annual wage negotiations and a sustained high unemployment rate‚" Joffe said.
Joffe noted that as a result of the recent downgrade of South Africa's sovereign debt rating‚ the financial flexibility of government was negatively effected and likely to lead to potential ramifications for the municipal sector. This because a notable portion of local government funding is sourced from national and provincial government transfers.
"The challenging economic environment‚ compounded by above inflationary tariff increases being implemented across a number of municipal services (such as electricity) has placed increasing pressure on consumer affordability‚" Joffe said.
I-Net Bridge For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field. Go to: http://www.inet.co.za
LEGAL DISCLAIMER: This Message Board accepts no liability of legal consequences that arise from the Message Boards (e.g. defamation, slander, or other such crimes). All posted messages are the sole property of their respective authors. The maintainer does retain the right to remove any message posts for whatever reasons. People that post messages to this forum are not to libel/slander nor in any other way depict a company, entity, individual(s), or service in a false light; should they do so, the legal consequences are theirs alone. Bizcommunity.com will disclose authors' IP addresses to authorities if compelled to do so by a court of law.