Councillors in the City of Joburg council chambers in Braamnfontein on 30 September 2022. Picture: Neil McCartney / The Citizen
The City of Johannesburg’s council has rejected R2 billion short-term loan from the Development Bank of Southern Africa (DBSA).
On Friday, 136 councillors voted against approving the short-term loan during an extraordinary council sitting.
The metropolitan’s mayor, Mpho Phalatse had called for an urgent sitting for the City’s councillors to vote on the item.
This comes after Phalatse conceded that the City’s finances were “not in the best position” and indicated that the multiparty coalition was seeking council to approve a short-term loan.
Although the mayor says the City was still able to meet its financial commitments, the African National Congress (ANC), however, claims that the metro was on the verge of financial ruin and predicted that municipal workers would not be paid in January.
Before voting commenced, councillors debated on the loan matter and asked the Democratic Alliance (DA) to give reasons, among other things, on how the city would pay back the funds.
“We demand answers… we need to know how we got to where we are now. We need to know why this request is brought to council only now.
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“The truth is that the coalition government has failed to do financial forecasting [and] this is a sign of incompetence, which proves the DA’s inability to govern a mega city like Johannesburg,” African Transformation Movement (ATM) Johannesburg chair, Lubabalo Magwentshu said on Friday.
Magwentshu called on the council to refuse the approval of the loan, saying that the DA-led coalition government must “come clean about what really happened to the City’s purse”.
“What we should be presented with today is a real financial picture. The DA must put their money where their mouth is and be transparent about the true state of the City’s finances.”
African Independent Congress (AIC) councillor, Margaret Arnolds criticised the DA for “lying” to the City’s 6 million residents, while the Economic Freedom Fighters (EFF) said the metro needed improving before applying for loans.
“On the 27th of May, just a month before we receive a new budget of R77 billion, the DA-led coalition decided to apply for a loan for cashflow problems that may arise. They advanced a hypothetical argument far distant from the service-oriented approach for the residents of the City of Joburg.
“[What] is happening here is that the DA wants to apply for money that we do not have… it is absurd,” EFF councillor, Nkosi said.
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Meanwhile, ActionSA’s Lebohang Mokoka said the party supported the loan request, but cautioned the City to “borrow responsibly”.
“We must remain credit worthy,” Mokoka told the committee.
After the vote, ANC Joburg regional chair Dada Morero told The Citizen‘s Lunga Mzangwe that the loan request didn’t make sense since there would be high interest for the City to pay back.
“[The DA] insisted there’s enough cash in the City and there’s no need to worry. In fact, the ANC raised this matter as early as July that the budget was under funded by at least R3.5 billion at the time so we raised concerns and they never took us seriously,” he said.
Friday’s council meeting was delayed due to protesting municipal workers.
South African Municipal Workers Union (Samwu) members picketed outside the council chambers in Braamfontein demanding to meet with Phalatse.
According to the union, the demonstrations was a result of the City’s failure to settle the salary disparities of municipal workers.
Thousands of Samwu members blockaded the M1 highway on Thursday, causing delays during peak rush hour traffic.
Public servants affiliated with the Public Service Association (PSA) also embarked on a nationwide strike on Friday, to amplify their rejection of government’s 3% wage increase offer.