Tshwane metro gets R1-billion loan for “cleaning, service delivery”
Council members rejecting the loan described it as a terrible financial move as Tshwane was not in a healthy financial state and was effectively borrowing money from Eskom and Rand Water by not paying their bills. The R1-billion is said to just pile on more debt.

The Tshwane metro has been approved to pile on more debt in the form of a loan worth just over R1-billion, despite being financially “in the red”.
During an ordinary sitting on January 25, the council approved the metro acquiring a R1 069 155 000 short-term loan from Absa bank at prime plus 200 (2%) basis points.
Tshwane had to surrender close to R19-million security for the loan.
But there was objection from opposition parties that felt the Capital City was taking on a pile of financial weight despite low revenue collection in 2023, likening the approval to “gifting an alcoholic a case of brandy for their birthday”.
The nod for the loan was given by a 111 council majority of coalition members plus some small parties like Good, Defenders of the People (DOP) and Cope.
During a special council sitting of May 31, 2023, council capped the acquisition of short-term debt for the 2023/24 financial year at R1 billion.
Tshwane group financial services said the purpose of the short-term loan facility was to assist in meeting its cashflow requirements in the 23/24 financial year.
“Tshwane needs to secure short-term debt, to accommodate any short-term cash shortfalls during the current financial year.”
Tshwane mayor Cilliers Brink said any government in the same circumstances would not be arrogant about its financial position.
He said the loan facility would be used for operational expenditure, such as cleaning and providing better service.
“We acknowledge that there are serious problems and need all the measures to assure [usher] Tshwane out of trouble.”
Brink said the metro had not performed as planned financially as per budget and funding plan.
“We did not make the aimed distribution loss-savings as we had aimed to and even billing in addition to collections is not what it should be.”
Brink said revenue collection targets needed to be increased.
He said Tshwane was sitting on an R23.3- billion debtor’s book.
“Six out of 10 residents pay their bills on time and we owe it to the six to overturn the culture of non-payment.”
Finance MMC Jacqui Uys said: “Every city needs a rolling overdraft facility, when we reach the end of a financial.”
She said in July, the overdraft would need to be settled in full and reapplied for.
“As such in May 2023, when the city approved the 2023/2024 budget, council already budgeted for this overdraft facility and recommended that the city go to market to request the facility.
“Tshwane can start using it as per the previously approved budget.”
ActionSA Cllr Tshepiso Modiba, member of the S79 standing committee on finance, said ActionSA welcomed the approval of the loan, “an overdraft from its primary banker”.
“These funds will assist the city in the medium-term to meet our financial obligations. Currently the city’s cashflow is running at a possible short term [shortfall].”
“The public needs to understand that the city is under financial distress at the moment, so if the city could not obtain the financial facility, there would be a point where services are not rendered to the public.”
Republican Conference of Tshwane councillor Lex Middelberg, who opposed the loan, said: “Payment delinquency is at its highest level in history.
“At this stage of the year, we are 8% under collection against budget and the figure is worsening.
“Rates and taxes are simply too high for residents to afford and hence [more than] >53% pay nothing, >28% of ratepayers fall behind by an average of three months every year.”
Middelberg said Tshwane was suffering bad debt as a result of taxes that were too high.
“Economic theory teaches that if you raise taxes beyond the means of the taxpayer you induce tax avoidance, migration and delinquency and actually get less revenue than what you would get at lower rates.
“Usually, a well-planned city would have taken bridging finance early in the year, taking it this later in the financial year (five months before year-end) signifies severe cash flow strictures.”
He said the loan was irresponsible.
“We are already effectively borrowing money from Eskom and Rand Water by not paying their bills to the tune of R5 billion. This just adds to the issue.
“Giving a loan to this coalition government is tantamount to gifting an alcoholic a case of brandy on his birthday.”
ANC Tshwane spokesperson Bafuze Yabo also objected to the uptake of the loan.
“The application of the loan report was supposed to be accompanied by a revenue recovery plan because we are aware that the city’s revenue collection track record is a shambles. We can’t commit posterity to a debt that could have been avoided if there was an effort to collect revenue.”
Yabo said Tshwane had failed dismally and had no idea how it would enhance its revenue collection.
He claimed that the Tshwane ya Tima campaign was a facade used to mask underlying problems in the finance department.
Yabo said Tshwane was in the red and the lack of service delivery was proof of this.
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