MAVERICK CITIZEN

eThekwini Municipality: It will take at least two years to rebuild Durban’s economy in the wake of Covid-19

By Zukiswa Pikoli 24 February 2021

City Hall, Durban, KwaZulu-Natal. (Photo: Flickr / Flowcomm)

The eThekwini Municipality will lose an estimated R34-billion in income because of Covid-19, the major downturn in the economy and resultant job losses.

Covid-19 had been a “wake-up call” in how we view current economic models, according to eThekwini Municipality Chief Strategy Officer Adrian Peters.

Speaking at a webinar on Wednesday, 24 February, hosted by the Dullah Omar Institute, Peters said: “We can’t have economic models where other people starve and others hoard resources that are of no value to society… the disparities that we see, we certainly can’t continue to have that, especially when all of that is at the expense of the environment and environmental thresholds that we are beginning to understand are thresholds that are having a bigger effect on our vulnerabilities.”

The municipality set up a Covid-19 command council chaired by the mayor, which meets weekly and coordinates the response to the pandemic of local government departments.

The council also monitors the statistics of the pandemic, said Peters. He reminded everyone at the webinar that eThekwini had been identified as a hotspot — however, the numbers were coming down, with the death rate now at 2.3%. He said where the municipality had undergone notable challenges were in Chatsworth, Phoenix and Pinetown.

Addressing how staff had been affected, Peters said that they had to go through training and familiarisation of new processes necessitated by Covid-19, such as remote working in order to maintain social distancing and how to make better use of technology, including factoring in management processes.

eThekwini had been wrestling with the concept of how to make itself a 24-hour municipality and Covid-19 fast-tracked the thinking and development around this by also looking at how municipal services would respond to businesses that had been forced to stay open longer.

On the economic impact, Peters showed a slide estimating that the municipality would lose R34-billion, encompassing the manufacturing, finance and insurance services, trade and accommodation, and the transport, storage and communications sectors.

The estimated number of companies that closed down is 6,346, with a loss of 304,459 jobs between April and July 2020, which meant that unemployment increased by 14% in Q3.

Peters also highlighted that the impact of petroleum company Engen shutting down in eThekwini meant that it had lost a client that generated revenue for the municipality of just less than R500-million a year.

eThekwini’s economic recovery plan was created to “build a more inclusive, innovative, and stable economy”, said Peters. Its primary objectives are to:

  • Aggressively invest in infrastructure to unlock catalytic projects;
  • Promote employment-oriented strategic industrialisation and investment attraction;
  • Celebrate Durban to grow tourism, cultural and creative industries;
  • Drastically improve the business environment; and
  • Grow the social and solidarity economy.

Peters explained that the lockdown had also affected the ability of residents to pay for municipal services as many people had not been paid their full salaries or had lost their jobs. The municipality has had to use R3-billion from its reserves to cover these losses as well as other expenses directly related to Covid-19, such as PPE, the SIU investigations on procurement processes, feeding food-insecure residents, disinfecting and upping investment in water and water tanks for sanitation purposes.

The reserves of the municipality would take a long time to build up, said Peters, estimating that it would take reallocating about 5% of the municipality’s total budget to begin rebuilding them. It would take two or more years to return to the previous level of economic activity.

Urban safety, particularly instances of gender-based violence (GBV), also emerged as an area that eThekwini needed to have a greater focus on during lockdown, which Peters said was now being tracked weekly according to the GBV plan that had now been established.

Peters also noted that what the pandemic had shown was that there needed to be social compacts with civil society, the private sector, academia and the municipality of eThekwini to effect an improvement in service delivery.

The key lessons, according to Peters, are:

  • The municipality needs to invest more in its health infrastructure, particularly staffing, to improve the health sector’s capacity;
  • Payment systems need to be fully automated. The municipality has developed free apps to facilitate this. It would implement new credit control measures, which he admitted were not good for the municipality’s cash flow, but were good for revenue generation and would also provide clients with some relief; and
  • The municipality needs to “pull back” from using internal funding and instead use grants and look at alternative methods of funding. The municipality also needs to cut expenditure and would target bonuses, overtime and office frills such as newspapers and bottled water. DM/MC

Information pertaining to Covid-19, vaccines, how to control the spread of the virus and potential treatments is ever-changing. Under the South African Disaster Management Act Regulation 11(5)(c), it is prohibited to publish information through any medium with the intention to deceive people on government measures to address Covid-19. We are, therefore, disabling the comment section on this article in order to protect both the commenting member and ourselves from potential liability. Should you have additional information we should know about, please email [email protected]

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"Information pertaining to Covid-19, vaccines, how to control the spread of the virus and potential treatments is ever-changing. Under the South African Disaster Management Act Regulation 11(5)(c) it is prohibited to publish information through any medium with the intention to deceive people on government measures to address COVID-19. We are therefore disabling the comment section on this article in order to protect both the commenting member and ourselves from potential liability. Should you have additional information that you think we should know, please email [email protected]"

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