House Chairperson, the Select Committee on Finance had engagements with National Treasury and the executive mayors of the five of the eight South African metros between August and September 2018, namely Nelson Mandela Bay, Buffalo City, Mangaung, Ethekwini and the City of Cape Town. The committee has previously engaged the three Gauteng metros, namely the City of Tshwane, Johannesburg and Ekurhuleni in August 2017.
The objective of the engagement was to assist efficiency, effectiveness and the value for money in service delivered by the metros in line with the fiscal oversight role of the committee. Engaging the metropolitan forms part of the committee's strategic goal of ensuring effective oversight over government finances to ensure responsiveness of the budget to the needs of the people of South Africa. The metros have an important role to play in stimulating economic growth. The metros economic growth has been growing faster than the national economy. The metros are the engines of job creation and economic activities generating close to 60% of the GDP. Statistics SA has shown that about 50% of all employment created, formal and informal was in the eight metros. About 60% of South Africa's population is also concentrated in the metros due to the better economic performance.
The metros engaged by the committee presented socioeconomic objectives and progress made with the implementation of the respective growth and development strategies, the built environment performance plans, Bepps, integrated development plans, IDPs, and local economic development, LED, plans. More importantly the metros reported on the overall budget implementation. The National Treasury also presented progress in its continued assessment of the metros based on their financial position, audit outcomes, service delivery
performance and the Medium-Term Revenue and Expenditure Framework, MTREF.
Six of the metros experienced a decline in cash for the financial year ending 2016-17. On average the metros performed at 96,2% on the operating revenue and 96,8% on the operating expenditure. The Buffalo City Metro cash and cash equivalents decreased in 2016-17 as compared to the previous financial year. Now Nelson Mandela Bay metro's cash and cash equivalents increased much in 2016-17. The Mangaung Metro and the City of Cape Town audit outcomes regressed while Buffalo City improved when compared to the previous financial year. The rest of the metros audit outcomes remain unchanged. All metros except for Nelson Mandela Bay and Mangaung presented funded budget for the MTREF period.
Hon House Chair, with regard to recommendations - there are 16 recommendations, and I would just highlight a few. In future engagements, and that would be in the Sixth Parliament, metros have to present progress made in resolving the challenges identified in implementing respective economic growth and development strategies, the Bepps and the economic projects that would grow their respective economies to create jobs and source much-needed revenue to address service delivery. The metros such as Mangaung which are depending
heavily on conditional grants for their operations to develop own internal resources of revenue to supplement conditional grants in the next engagement with the committee these metros should report measures taken to boost the internal resources of revenue.
We also recommend that Mangaung Metro should address all the challenges it identified, which include cash performance, billing revenue and expenditure. And these action plans are already in place and are being implemented. The metro should report progress made in implementation of these action plans but we received a report from the Auditor-General already. The metro should address service delivery challenges identified, particularly the water and electricity loses that are huge and effect revenue collection. The metro should also report on progress made in addressing the challenges and they should strive towards obtaining clean audits, develop action plans to resolve the audit findings of the Auditor- General.
The national and provincial Treasury should take into consideration the capacity of the municipalities to spend additional budget allocated during the adjustment process and to transfer monies to metros and provinces on time. Higher cost of personnel is considered a historic problem. The affected metros should put effect of
measures in place to turn this situation around and report progress made in the next engagement that will be in the Sixth Parliament.
National and provincial Treasury should in addition, also to the comprehensive support that they provide to metros and municipality conduct robust fiscal oversight to verify alignment between budgets spent and actual service delivery on time. The City of Cape Town should put pressures in place to address high crime levels with support from other stakeholders and spheres of government, but in the meantime, since August last year, the Minister of Police made interventions in this regard - that is known to us.
The committee also urge the City of Cape Town to address the informal settlement spatial planning. Furthermore, the City of Cape Town should plan properly and budget for in-migration exploring various implementation models and co-operation option, including triple Ps - profit, people and planet, and to look also to international models. Buffalo City should address all challenges raised by the National Treasury in the assessment of their performance and report progress to the committee. I submit this Report for adoption by the House. Thank you.
Debate concluded.
Question put: That the Report be adopted.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Report accordingly adopted in accordance of section 65 of the Constitution.