Latest news with #NationalTreasury
IOL News
3 hours ago
- Business
- IOL News
One step off the greylist, but who's watching the watchdogs?
The announcement from the FATF Plenary in Strasbourg, France, marked a significant milestone for South Africa's beleaguered financial sector. Image: Ron AI BY ALL accounts, South Africa has come a long way since February 2023, when it was placed on the Financial Action Task Force (FATF) greylist over concerns about weak enforcement mechanisms and a lack of political will to combat high-level corruption. Now, nearly two years down the line, the country is on the cusp of delisting after 'substantially completed' all 22 action items set out by the global watchdog. The announcement from the FATF Plenary in Strasbourg, France, marked a significant milestone for South Africa's beleaguered financial sector. The country now awaits an on-site verification visit — a final step before potential delisting at the next FATF Plenary in October 2025. 'This is not just about ticking boxes,' National Treasury said in a recently released statement. 'This is about rebuilding institutions hollowed out during years of state capture, and restoring credibility to our financial systems.' Yet while the technical progress has been lauded internationally, domestic critics warn that celebration may be premature — and that complacency could unravel everything. South Africa's greylisting in 2023 was more than a reputational blow; it was a financial reckoning. Banks faced higher correspondent banking costs, foreign investment slowed, and businesses were forced to navigate an increasingly complex and costly regulatory environment. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ The legacy of state capture — under which law enforcement agencies were deliberately weakened — made the path to compliance long and arduous. But according to the FATF's latest communiqué: 'South Africa has demonstrated a sustained increase in investigations and prosecutions of serious and complex money laundering and the full range of terror financing activities in line with its risk profile.' That turnaround, according to officials, was only possible due to the relentless work of key institutions such as the Directorate for Priority Crime Investigation (DPCI — alias Hawks), the State Security Agency (SSA), and the National Prosecuting Authority (NPA). 'Without their commitment, we would still be floundering,' read the Treasury statement. 'These are the same institutions that were targeted during the Zuma era. To see them rise again is nothing short of remarkable.' The FATF has confirmed that South Africa has met the technical requirements for delisting, but the final verdict rests with the FATF Africa Joint Group, which is set to conduct an on-site visit prior to the October 2025 Plenary. 'The Joint Group will verify that implementation of AML/CFT reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation in the future,' stated the FATF on June 13. National Treasury confirmed that preparations for the visit were already underway. While Treasury paints a picture of institutional renewal, opposition parties remain deeply skeptical. The DA, now part of the Government of National Unity (GNU), has cautiously welcomed the FATF's upgrade of South Africa's progress but issued a warning against any complacency that could derail the country's full removal. 'While this is an important step, the DA cautions the NPA and our financial regulators against complacency,' DA Deputy Spokesperson on Finance Wendy Alexander said in a statement. 'Exiting the greylist remains subject to a site visit by the FATF ahead of the body's next plenary in October.' Alexander stressed that further delays would only deepen the damage. 'The longer South Africa stays on the greylist, the harder it will be for our banks to do business both domestically and internationally,' she warned, adding that a one-off effort would not be enough. 'Exiting and staying off the greylist requires not once-off window dressing, but sustained change and implementation.' South Africa shares the spotlight with several African nations making strides against financial crime. Mali and Tanzania have been officially delisted from the FATF greylist, while Nigeria, Mozambique, and Burkina Faso were also recognised for having substantially completed their respective action plans.
The Citizen
13 hours ago
- Business
- The Citizen
Report shows that consumers owe municipalities R416.1 billion
As of March 31, total consumers debt owed to municipalities amounted to R416.1 billion when compared to R347.6 billion that was reported in the same period in 2023/24. This is according to a report released by National Treasury on local government revenue and expenditure for the third quarter of the 2024/25 financial year. 'A total amount of R10.8 billion or 2.6% has been written off as bad debt. The largest component of this debt relates to households and represents 72% or R299.5 billion (73 % or R253.6 billion in the same period in 2023/24 financial year),' National Treasury said on Wednesday. The third quarter publication covers 257 municipalities on financial information and conditional grant information. 'The government debt accounts for 6% or R24.9 billion (R21 billion reported in the same period in 2023/24) of the total outstanding debtors. 'Total outstanding creditors owed by municipalities as at 31 March 2025 amount to R131.8 billion an increase from R106.7 billion reported in the same quarter in 2023/24. R111.8 billion or 84.8% has been outstanding for more than 90 days,' said Treasury. Provinces with the highest percentage of outstanding municipal creditors in the category greater than 90 days include the Free State at 94.4%, Mpumalanga at 93.9%, the Northern Cape at 93.8%, and the North West at 84.4%. An increase in outstanding creditors could be an indication that municipalities are experiencing liquidity and cash challenges and consequently are delaying the settlement of outstanding debt owed. 'Analysis of the collection rates indicates that while municipalities' average collection rate on the adjusted budget is 85%, the aggregated actual collection against billed and other revenue is only 63.6 percent. The metros budgeted (adjusted budget) for a 87.9% collection rate and collected only 58.2%. The secondary cities budgeted billing was 86.3% and the actual collection was 69.7%,' it explained. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
The Citizen
a day ago
- Business
- The Citizen
Municipal debt soars past R416b as households struggle to pay
South African municipalities are under growing financial pressure, with consumer debt and unpaid bills climbing steeply and collection rates falling short of expectations, according to the latest report from National Treasury. As of March 31, total consumer debt owed to municipalities amounted to R416.1b, compared with R347.6b reported in the same period in 2023/24. This is according to a report released by National Treasury on local government revenue and expenditure for the third quarter of the 2024/25 financial year. 'A total amount of R10.8b or 2.6% has been written off as bad debt. The largest component of this debt relates to households and represents 72% or R299.5b (73% or R253.6b in the same period in 2023/24 financial year),' National Treasury said yesterday. The third quarter publication covers 257 municipalities on financial information and conditional grant information. 'The government debt accounts for 6% or R24.9b (R21b reported in the same period in 2023/24) of the total outstanding debtors. 'Total outstanding creditors owed by municipalities as at March 31 amounts to R131.8b, an increase from R106.7b reported in the same quarter in 2023/24. R111.8b or 84.8% has been outstanding for more than 90 days,' said National Treasury. Provinces with the highest percentage of outstanding municipal creditors in the category greater than 90 days include the Free State at 94.4%, Mpumalanga at 93.9%, the Northern Cape at 93.8% and the North West at 84.4%. An increase in outstanding creditors could be an indication that municipalities are experiencing liquidity and cash challenges and consequently are delaying the settlement of outstanding debt owed. 'Analysis of the collection rates indicates that while municipalities' average collection rate on the adjusted budget is 85%, the aggregated actual collection against billed and other revenue is only 63.6%. The metros budgeted (adjusted budget) for an 87.9% collection rate and collected only 58.2%. The secondary cities budgeted billing was 86.3% and the actual collection was 69.7%,' it explained. Municipal spending As at March 31, aggregate spending by municipalities was at 64.9% or R432.2b of the total adjusted expenditure budget of R665.9b. 'Aggregated billing and other revenue was 71.7% or R478b of the total adjusted revenue budget of R666.8b. 'Capital expenditure was R26.4b or 33.6% of the adjusted capital budget of R78.5b. 'The adjusted operating expenditure budget was R587.5b, of which R405.8b or 69.1%) was spent by March 31.' Municipalities adjusted their salaries and wages (including remuneration of councillors) budget from R162.6b in the adopted budget to R161.1b in the adjusted budget for the 2024/25 financial year, representing a R1.5b or a 0.9% decrease. The budget for salaries and wages constituted 27.4 % of the total adjusted operating expenditure budget of R587.5b. As at March 31, R114.2b or 70.9% of the adjusted salary budget was spent. Conditional Grants As at March 31, municipalities were allocated R44.7b for direct conditional grants, of which R38.9b has been transferred. This amount excludes the Equitable Share allocation, Urban Settlements Development Grant as a supplementary capital allocation to metropolitan municipalities, as well as indirect grants. National transferring officers (NTOs) reported spending of R25b, or 55.9%, while municipalities reported spending of R19.5b or 43.7% of the total allocation. In comparison, during the same period in the previous financial year, NTOs reported 58.8% against the total adjusted allocation for direct conditional grants, while municipalities reported expenditure of 46.8 %. 'There are several factors that attributed to the overall underspending of the conditional grants by municipalities during the 2024/25 financial year. Some of these factors include late submissions of business and implementation plans, which hindered timely implementation, while persistent supply chain management challenges disrupted procurement processes. 'These issues not only affected grant performance in the third quarter but also led to reduced allocations for many municipalities during the adjustment budget process, as uncommitted funds were reallocated to better-performing municipalities. 'The impact of these challenges highlights the need for stronger municipal planning, more efficient SCM systems, and stricter enforcement of procurement regulations to prevent similar underspending in the future.' National Treasury said the third quarter infrastructure grant performance presents a mixed picture, with R23.8b (56.3%) expended from the R42.8b allocation. 'While showing moderate overall progress, significant disparities exist between better-performing grants and those facing implementation challenges. While this demonstrates moderate progress, the performance varies considerably across different grants, with some showing effective implementation and others lagging behind. 'While some grants such as the Integrated Urban Development Grant, Municipal Infrastructure Grant and the Regional Infrastructure Grant demonstrate efficient spending with expenditure over 60% by the end of the third quarter, others like the Municipal Disaster Recovery Grant and the Water Services Infrastructure Grant remain severely underperforming. 'This inconsistency highlights the need for a more balanced approach in grant management, such as rewarding well-performing municipalities with additional support while imposing stricter consequences for chronic underspending. Without urgent corrective measures, critical service delivery backlogs will continue to worsen,' National Treasury said. Further details on this report can be accessed on the National Treasury's website. – Breaking news at your fingertips… Follow Caxton Network News on Facebook and join our WhatsApp channel. Nuus wat saakmaak. Volg Caxton Netwerk-nuus op Facebook en sluit aan by ons WhatsApp-kanaal. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
IOL News
a day ago
- Business
- IOL News
Cities cut salaries as inflation bites – R1. 5 billion slash in municipal wages
National Treasury did note that – as at the end of March – almost 30% of the adjusted salary budget had yet to be spent. The National Treasury's statement on local government revenue and expenditure for the last quarter of the 2024/25 fiscal year shows that the municipal budget for salaries was almost a third, at 27.4%, of total operating expenses. However, the statement also indicates that salaries and wages, including that of Councillors, declined 0.9% between the February and October budgets last year. This was a decline of R1.5 billion at a time when inflation was, on average, 3.6%. National Treasury did not indicate whether this was due to less staff, although the Auditor-General's most recent report into municipalities indicated that there were vacancies in key areas such as finance and technical services. National Treasury did note that – as at the end of March – almost 30% of the adjusted salary budget had yet to be spent.
Daily Maverick
2 days ago
- Business
- Daily Maverick
Promises, potholes and a R71bn budget — can Mayor Xaba Fix Durban?
eThekwini Mayor Cyril Xaba is trying to lead a turnaround, but the city faces spiralling debt and a billing crisis. eThekwini Mayor Cyril Xaba is talking it up, and who can blame him? The man at the helm of a city hobbled by corruption is putting his best foot forward, trying to build trust with citizens fed up with crooks. Last week, Xaba passed a R70.9-billion budget, and his recent speeches to council and business have been measured and optimistic. Xaba, constantly drilled by ratepayers, is basking in a bit of glory after Durban successfully pulled off a host of big sporting events, which saw the city spruce up and the metro police out in full force. But while the mayor's reassuring language is laden with mollifying words about National Treasury prescripts and the virtues of consequence management, he is in the spotlight. The city's public relations machine aims to signal competency and accountability, distancing Xaba from the ineptitude and looting that have come to characterise the municipality. The jury's out on how much difference Xaba has made since he was parachuted into the top job a year ago. His installation coincided with a provincial intervention in the city headed by former city manager Mike Sutcliffe and former presidential director-general Cassius Lubisi. A month before their arrival, President Cyril Ramaphosa established a working group in response to business concerns about city failures. And, a year before that, the city launched a turnaround strategy. So, while First Citizen Cyril is trying hard, ratepayers, business and opposition parties are concerned that the city is sliding deeper into debt. Not everyone likes Xaba's numbers, especially tariff increases. The average property rate increase is 5.9%; Electricity is up by 12.72%; Water is up by 13% for residents and 14% for businesses; Sanitation is up by 11%; and Solid waste is up by 9%. Daily Maverick sent the city a detailed list of questions relating to the budget, which it says the treasury department wants to answer fully. We will share this when it becomes available. In broad strokes, the budget allows R63-billion for operational expenses and R7.3-billion for capital projects. The big-ticket items include bulk purchases from uMngeni-uThukela Water (R5.7-billion) and Eskom (R18.7-billion). The city spends R15.2-billion on salaries for about 24,000 staff, R7.6 billion on contractors and R1-billion on interest for loans. Debt crisis The city's big issue is growing debt. Residents owe R35.5-billion, which the city puts down to the economic crunch, but critics say rates and services are too costly. Of the total debt, 40% is for unpaid water. Outstanding property rates and unpaid electricity account for 25% and 15%. Most of the debt (75%) is owed by households. Businesses owe 20% and state departments the balance. In December 2023, the debtor's book was at R28-billion. A year later, it was at R35.5-billion, which had risen to R38.6-billion by April. This means the city will need to borrow more or bill more for services. In a bid to staunch the losses, it is offering businesses and residents a chance to write off 50% of their debt if they settle before the end of June. The valuation roll has only 554,280 rated properties (481,000 residences, 17,000 businesses and 7,000 industrial). About 330,000 properties are valued at less than R350,000 and rates-exempt. Another 150,000 are worth more than R350,000, but are not rateable. Durban, with a population of about four million, has more informal settlements than any other city in the country (about 600 with 314,000 households). And, other metros in South Africa have more rate-paying households. Figures from the Centre for Affordable Housing Finance in Africa show about 824,000 residential properties on the deeds registry in Johannesburg and about 767,000 in Cape Town. In eThekwini, the Ingonyama Trust (land administered by the Zulu king) controls huge swathes of land where properties are not rated. Alan Beesley is an accountant, a former eThekwini councillor and ActionSA's finance spokesman. 'The only way for the city to fix its books is to spend less and offer a better service that will attract more ratepayers. At the moment, Durban has a shrinking ratepayer base subsidising a growing number of people not paying for services.' Business backlash Xaba has promised the city will bring in more money from rates and services, and that officials will waste less and work harder. 'Dashboards linked to service delivery targets' are among a host of measures to improve and cut annual water losses of R2-billion. 'We will bury potholes, sweep the streets, cut the verges and keep the lights on,' Xaba promised. Reaction to the budget has been testy. The Durban Chamber of Commerce and Industry is concerned with low confidence in the municipality's ability to spend on priorities. There was a 'continuous disconnect' between what happened on the ground in Durban and the 'grand plans' emerging from the Presidential Working Group. 'We need to see meaningful action with key timelines and tangible reforms that will accelerate service delivery and reverse the economic decline,' the chamber said. Water losses might be higher because many meters were 'dysfunctional or not working at all'. Tariff tensions The Ethekwini Ratepayers Protest Movement (ERPM) is tired of city hall promises. ERPM's Rose Cortes roasted the 'habit of reckless lending and spending', saying some parts of the municipality were 'delinquent'. The ERPM says city billing is a mess. 'For example, they didn't read the water meters for extended periods and some residents had underground leaks which they didn't know about. Then, when they actually read the meter, you are hit with a massive bill you can't pay. They won't give us stats on how many meter readers they have. The contractors are paid, but they don't read the meters, some for as long as 500 days.' Cortes says some houses valued at less than R350,000, which qualify for rates exemption, free water and discounted electricity, don't receive this benefit, but others that don't qualify do. The only way to stop blatant theft and crooked deals was line-by-line scrutiny of spending. Cortes said the city recently ran out of money to pay contracted plumbers and even the mayor expressed concerns about the poor workmanship by contractors. Also, city schemes to provide poor relief were dubious, Cortes said. 'Reports on indigent households are inaccurate and the process to register for indigent care is ineffective and stupid.' ERPM's chair Asad Gafar said 500,000 ratepayers effectively cross-subsidised eThekwini's four million-plus residents. 'Ratepayers wouldn't object to the cross-subsidy if the city improved the lives of the poor, but it doesn't. Instead, losses increased, like the water that bleeds into the ground through leaking pipes, or just flows 24/7 at standpipes, unmonitored. Or, the water is pumped into tankers by the mafias and then dumped so they can turn the truck around and fill it up and get paid for another trip.' Broken billing Democratic Alliance councillor Alicia Kissoon sits on the city's finance committee. She said the budget was 'polished on paper', but operationally detached. The real picture emerged in the adjustments budget, where money was 'constantly reallocated in a cycle of crisis management which is like robbing Peter to pay Paul'. R345-million for 100 new water tankers was a prime example of short-term thinking. 'Tankers do not fix leaking infrastructure. It masks a systemic failure to repair broken pipes.' Kissoon said it was unsustainable for so many residents not to pay for rates and services. The city was dealing with a 'dangerous culture of administrative neglect, contractor abuse and non-payment.' Inkatha Freedom Party councillor Jonathan Annipen voted for the budget because the city provided free services to poor residents. He praised the city's recent 'determined effort at transparency'. To 'avoid collapse', the city had to improve revenue collection, debt recovery and credit control. But, Annipen said, billing was bedevilled. 'Daily, we hear heart-wrenching stories where frail, elderly and disabled citizens have their services disconnected, and the city has no credible dispute mechanism. I intervened in the case of a pensioner who was suicidal because he was lumped with a R1.3-million monthly bill for water and electricity, but investigations revealed he was actually owed a credit. 'People wait three months for a water leak to be repaired. Water is flowing down the street by gallons and you call the contact centre, they tell you the fault has been closed.' DM
