Mogale City’s draft budget Part 12: Mogale vows to curb wasteful spending

Part 12 of simplifying the Mogale City Local Municipality’s (MCLM) recent Medium-Term Revenue and Expenditure Framework (MTREF), or the draft budget, gives an overview of the budget assumptions.

• Also read: Timeline for Mogale’s IDP and budget process revealed

The MTREF cites that the budget for the next three years is shaped by South Africa’s tough economic conditions and aims to support growth in line with the National Development Plan.

Economic growth for 2023 has slowed to 0.6%, down from earlier projections, mainly due to weak performance in the third quarter. However, growth is expected to improve to an average of 1.6% between 2024 and 2026, helped by fewer power outages, lower inflation and better employment and investment conditions.

It continued that to boost long-term growth, the government is focusing on attracting private investment and completing key reforms. For MCLM to stay financially stable, they plan to cut non-essential costs, including security contracts, unnecessary employee allowances and fuel expenses. Efforts are also being made to avoid wasteful spending and to ensure timely payments to major service providers including Eskom and Rand Water.

It continued to cite that the revenue collection rate currently stands at 86%, and there’s no expectation to recover old debt due to past trends. Nonetheless, strategies to boost revenue and curb new debt continue. A 5% salary increase was budgeted between July 1 2024, and June 30, 2029, based on inflation forecasts, while new wage agreements are under discussion.

It concluded that the budget’s viability will be assessed through cash flow forecasts and the realism of revenue collection assumptions.