South Africa

Unrest LATEST: Durban’s economic loss could hit more than R20bn | Muhabarishaji News

eThekwini Municipality is set to undertake a special adjustment budget process in consultation with National Treasury as a result of the financial impact of the civil unrest which could rise to more than R20 billion in losses for the region.

This was decided at a special Executive Committee Meeting on Tuesday. In addition to the adjustment budget process, which will kick off in August, the city will ask National Treasury to consider a possible repurposing of grants as well as additional funding to assist with economic recovery after the unrest.

The city’s financial losses due regarding cash collection has been estimated to be R50 million for the first week of the unrest with a potential loss of rates income due to damages incurred estimated at more than R300 million.

According to a report presented by Acting City Manager Musa Mbhele, initial estimates have suggested that businesses have experienced stock losses of more than R1billion, R15 billion in property and equipment damage with a  total of 55 000 informal traders and 40 000 formal business impacted. He said the total impact on the loss of GDP in the region was expected to rise to more than R20 billion. 

The municipality has also undertaken to assist affected businesses and is considering implementing the following relief programmes subject to approval.

  • Section 78 of the Municipal Property Rates Act to allow business property owners to apply for a supplementary valuation of the property. 
  • Use of Section 14 of the Rates Policy to implement a special rates rebate based on this being a disaster.  The municipality has called on businesses that will not be re-opening in the near future to approach the city to disconnect services so that utility charges are not raised.

The special Executive Committee Meeting was preceded by a mayoral citywide inspection to assess the extent of the damage to the city’s key economic nodes, including Cornubia Industrial Park, Bridge City Precinct and Riverhorse Valley Industrial Park. 

Mayor Mxolisi Kaunda and several business leaders told the media at the inspection sites that they were both committed to reviving Durban’s economy and rebuilding damaged infrastructure to save jobs following last week’s riots and looting.

Kaunda said the inspection was part of the Municipality’s multi-pronged strategy to retain investors and save the more than 129 000 jobs that were at risk of being lost. 

“The business sector this morning has committed to working hand in glove with the municipality to rebuild the city’s economy. It was encouraging to hear most of the anchor tenants in these  economic nodes saying they had no plans to leave the city and committing to work with us in hatching a plan to save jobs and attract more investors,” Kaunda said.

Durban Chamber of Commerce and Industry CEO Palesa Phili said most members had committed to keeping their investments in the city and to helping rebuild an even stronger economy.

Kaunda assured the business owners that eThekwini Metro Police, working with other law enforcement agencies, would increase visibility in all affected areas. Kaunda also warned business forums against preventing the rebuilding of businesses and urged them to work with the city to access opportunities. 

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