Finance minister says there is a three-year plan to fix the metro.
Not much has been said about the three-year plan to fix the City of Joburg; however, upgrading infrastructure is central to it. Picture: iStock
South Africa has signed a $1 billion (more than R16 billion) loan agreement with the New Development Bank (NDB) to upgrade infrastructure in the country’s eight metropolitan municipalities, including the City of Johannesburg.
The money will fund metropolitan municipal services under the Metro Trading Services Reform Programme (MTSR). This is the second loan the country has received for the same programme.
The MTSR is a reform programme aimed at improving the governance, financial sustainability and operational performance of municipal trading services in metropolitan municipalities, particularly in water and sanitation, electricity and energy, and solid waste management.
Fixing City of Joburg
This follows Finance minister Enoch Gogodongwana’s keynote address at the Development Bank of South Africa (DBSA)’s financial results announcement on Monday, where a three-year plan to fix the City of Joburg.
On Tuesday, National Treasury said the $1 billion loan will be repaid over 16 years, with a three-year grace period, and will carry an interest rate linked to the Secured Overnight Financing Rate (SOFR) plus 1.18508%.
“The NDB loan was prepared in coordination with development partners active in South Africa’s infrastructure sector,” added National Treasury.
Performance targets to be approved by metro Councils
National Treasury said the loan is performance-based, with financing linked to institutional strengthening and the achievement of independently verified, measurable performance targets approved by metro Councils for their trading services.
“The NDB is financing the programme with the World Bank, Asian Infrastructure Investment Bank, KFW Development Bank, and French Development Agency.
“The financing supports a government-led, performance-based reform programme implemented through South Africa’s existing legal, fiscal and institutional framework.”
Godongwana’s 3-year plan
News24 reported that Godongwana said the National Treasury will support the City of Johannesburg, regardless of who wins the metro after the local elections. South Africans will head to the polls on 4 November 2026 to vote for who will govern their municipalities.
“We have got a strategic development plan for an intensive intervention in the City of Joburg. We intend to move in there and stick around for three years, irrespective of the outcome of elections,” he said.
“I can tell you now, whatever the outcome of the elections, any government that comes will need our support. We will be there for the next three years, and we are working together with the DBSA.”
DBSA focuses on accelerating sustainable socio-economic development and improving quality of life by funding infrastructure projects in South Africa, the Southern African Development Community (SADC) region, and across the rest of Africa.
Areas National Treasury to give support in
Without revealing much about the three-year plan to rebuild the embattled City of Johannesburg, Godongwana added that National Treasury will support the metro in five key areas. However, he also did not explain which areas these are.
“We are going to provide support. We are not going to dissolve them. It is too late because of the elections. We don’t know what the outcome is going to be. But we will finalise the objective in three years. In other words, we will get Johannesburg right.”
It is safe to say that the key areas National Treasury will support align with the areas the MSTR programme aims to improve. These include governance, financial sustainability, and the operational performance of municipal trading services in metropolitan municipalities, particularly in water and sanitation, electricity and energy, and solid waste management.
Most importantly, infrastructure. Godongwana acknowledged that there is no infrastructure plan, citing that most money goes to fixing leaks because the infrastructure is old.
