How Nhlanhla Nene plans to defeat the inequalities of apartheid
The Treasury wants financially healthy municipalities to borrow to invest in capital assets
The government wants credit-worthy municipalities to borrow more so they can invest in the infrastructure necessary for service delivery. Finance Minister Nhlanhla Nene announced in his budget speech on the Treasury on Tuesday that the government was to review its policy on borrowing by creditworthy municipalities. Municipalities presently do have the power to borrow but according to an expert on municipal finance the appetite has not been strong and there have been constraints. This was something Treasury wanted to tackle by introducing more flexible financing models and opening up new areas of funding. In the past municipalities were able to pledge the revenue stream from their conditional grants as security for their loans but the take-up was slow. Now Treasury wants to encourage financially healthy municipalities to borrow to invest in capital assets such as bulk water and electricity infrastructure in order to fast-track delivery. Cities finance most of their budgets from their...
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