Tshwane tables R50bn budget minus debt

The Tshwane metro has tabled a fully funded budget exceeding R50-billion for the 2025/26 financial year in a move towards financial sustainability and improved service delivery.

The budget was formally endorsed by National Treasury, marking an achievement for the municipality, previously plagued by financial instability.

The announcement was made during the metro’s budget speech on May 15, with the Deputy Executive Mayor and MMC for Finance, Eugene Modise, hailing it as a turning point in Tshwane’s governance and fiscal management.

The budget doesn’t rely on external loans or borrowing, which MMC Modise described as historic and a reflection of responsible leadership.

“For the first time in many years, Tshwane can say it is funding its service delivery and capital projects without adding to its debt,” he said.

The metro has been under public scrutiny for years due to service delivery failures, erratic billing systems, power outages, and growing debt burdens.

In previous years, the municipality’s budget often included borrowing hundreds of millions to plug financial holes, fund infrastructure, or service existing debt.

Modise said stringent cost-cutting measures, improved revenue collection, and tough financial discipline helped Tshwane close its funding gap without resorting to loans.

The R54.6-billion budget will be split between operational and capital expenditures, the bulk going toward improving basic services, maintaining infrastructure, and ensuring financial recovery.

The metro expects to raise this through a combination of service charges (electricity, water, waste, and sanitation), property rates, and grants from the national and provincial governments.

The total revenue has increased by R777.5-million, a 2% rise driven by the following:

– Water service charges increased by R160.5-million due to improved billing and revenue collection.

– Interest earned from receivables surged by R437.2-million due to strengthened credit control measures.

– Property rates increased by R64.9-million.

– Fines, penalties and forfeits declined by R71-million, requiring a review of enforcement strategies.

Modise pointed out that improved revenue collection strategies, including enhanced billing systems and debt collection efforts, have started yielding results, with monthly cash balances improving significantly.

The capital budget for the year is R2.4-billion, targeted at revitalising decaying infrastructure and addressing historical service backlogs, while R52.2- billion was for the operational budget.

This will be supplemented by R7.4-billion in government grants and subsidies.

Modise emphasised that capital projects will prioritise areas that have long been neglected, such as Hammanskraal, Soshanguve, and Mamelodi, in line with the metro’s commitment to spatial equity and inclusive growth.

Modise highlighted a renewed focus on financial management and internal controls.

“We now have a credible, realistic, and fully funded budget. No more paper budgets,” asserted Modise.

While the budget attempts to cushion residents from harsh economic realities, tariff increases are unavoidable to maintain service delivery:

-Electricity: 10.2% increase, kept below Eskom’s 11.2% bulk tariff increase.

-Water: 13% increase, lower than Rand Water’s 15.3% increase.

-Sanitation: 6% increase

-Refuse removal: 4.6% increase.

Modise assured residents that the budget is part of a broader financial recovery plan endorsed by the National Treasury. The city is also working closely with Eskom and Rand Water to settle legacy debts and avoid service disruptions.

“We are not out of the woods yet, but this budget marks a decisive step in Tshwane’s financial recovery. It is about doing more with less, and doing it better.”

Jacqui Uys of the Democratic Alliance (DA) said the budget continues to treat residents as cash cows.

“The deputy mayor did what we feared he was going to do, and that is to table a budget that pushes the responsibility of the financial rescue onto the residents of the metro and treats them like cash cows.

“The DA has been a proponent for increasing the value of property that residents don’t pay rates in taxes on from R150 000 to R450 000. The deputy mayor’s budget only increases it to R250 000.

“That means that there is a large portion of our communities that could still not be able to qualify for free indigent services, which puts them into the bracket of paying in full for their refuge removal.”

ActionSA welcomed the tabling of the first fully funded budget.

According to the party, the budget reflects a clear focus on infrastructure upgrades, inner-city rejuvenation and equitable service delivery, while maintaining strict fiscal discipline.

“ActionSA is proud that GCR Ratings (GCR)’s recent revision of the city’s credit outlook to stable signals growing confidence in Tshwane’s financial management and its ability to contain costs and reduce debt risk, which previous administrations failed to achieve.

“In recognition of the new administration’s growth-focused approach, ActionSA welcomes the R780-million allocated to Economic Development and Spatial Planning. This is aligned with the city’s economic revitalisation strategy, which aims to attract over R17-billion in investment and create 80 000 jobs.”

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