Following two favourable ratings by two global credit ratings agencies within five short months, the City of Johannesburg’s Member of the Mayoral Committee for Finance, Cllr Geoff Makhubo, is expected to bring about a positive and encouraging vibe when he delivers his Budget Speech on Tuesday May 24.
A little more than a week ago Moody’s Investors Service raised both the City’s national and global scale ratings, saying it had noted the metro’s financial prudence and consistency in managing its finances.
Five months earlier, the City was given a major boost when Fitch upgraded its credit rating by a notch – from AA- to AA – in what Executive Mayor Cllr Parks Tau described as a “credible endorsement of Johannesburg’s financial stability”. It is against this background – which boosts the City’s profile as a strong and sound investment destination – that MMC Makhubo is expected to present a much improved Budget this year, the last one for the 2011-2016 municipal term.
The speech is expected to latch onto the theme of Executive Mayor’s State of the City Address about two weeks ago, when he spoke about the City’s rising economic democracy. It will also be in response to the views, ideas and inputs of thousands of Johannesburg residents who passionately took part in a series of Integrated Development Planning (IDP) meetings in April.
The City’s Budget might this year go as high as R55-billion – compared with R52.6 billion in the 2015-2016 financial – as major programmes such as the Corridors of Freedom, which featured prominently in Mayor Tau’s speech, steadily gain pace.
Johannesburg residents could expect more financial resources to be channelled towards the expansion of the Rea Vaya Bus Rapid Transit (BRT) system and other public transport infrastructure following the successful staging of the EcoMobility World Festival in Sandton in October last year in a bid to decongest the City’s streets, reduce greenhouse gas emissions, improve productivity and boost economic growth.
Housing, particularly social housing, and the electrification of informal settlements are expected to receive top priority, as will empowerment projects such as Jozi@Work, Vulindlel’ eJozi, Digital Ambassadors and the green and blues economies.
However, the Budget Speech comes at a time of economic turmoil in the country, when unemployment is rising and the cost of living is going through the roof. This is where MMC Makhubo will be expected to balance the needs of the City with the plight of many rate of its ratepayers, some of whom are already downscaling.
The City is also expected to intensify its efforts to cushion the lives of its vulnerable residents, including the elderly, orphans, ex-combatants and those living in the streets. These will, of course, come with increased social spending. But all in all, the 2016-2017 Budget will offer another layer of financial stability on which the future of the City will be built.
- The Budget Speech will be televised live on several community radio stations.