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Working to rebuild both the economy and destroyed infrastructure, government officials are now assessing the full extent of what is required.
Durban (eThekwini) Municipality is set to undertake a special adjustment budget process in consultation with National Treasury in August 2021 due to the financial impact of the civil unrest. According to the Municipality, this was revealed at a special Executive Committee Meeting on 20 July 2021. In addition, the City will be requesting National Treasury to consider possible repurposing of grants and additional funding to assist with the recovery and normalisation process.
Not only costing the country billions, the looting impacted an array of areas, one being municipal collections. eThekwini Municipality’s estimated financial loss regarding cash collections was R50 million for the first week of the unrest, and potential loss of rates income due to damages is estimated to be over R300 million.
With the increased unemployment and uncertainty, additional impacts will be felt in the coming months.
According to a report presented by Acting City Manager Musa Mbhele, initial estimates suggest that businesses have experienced losses of over R1 billion in stock and R15 billion in property and equipment damage. Additionally, 55 000 informal traders and 40 000 formal businesses were impacted—with the total impact on the loss of GDP in the region expected to rise to over 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 requests 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 citywide inspection led by Mayor Mxolisi Kaunda, with a high-powered delegation to determine 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 Kaunda said that the inspection was part of the Municipality’s multi-pronged strategy of retaining investors and saving over 129 000 jobs hanging in the balance. “The Business sector 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 of saving jobs and attracting more investors to the City,” said Kaunda.
Thankfully, The Chief Executive Officer of the Durban Chamber of Commerce and Industry, Palesa Phili, said most of their members have committed to keeping their investments in the City and helping rebuild an even more robust economy. The Mayor also assured the business owners that Metro Police would increase visibility in all affected areas by working with other law enforcement agencies. Kaunda also warned business forums against stopping the rebuilding of businesses and urged them to work with the City to access opportunities.
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