City of Joburg in about-turn on R2 billion DBSA loan

A R2 billion Development Bank of South Africa (DBSA) loan in-waiting first proposed by ousted Joburg mayor Dr Mpho Phalatse took centre stage on Wednesday when the Joburg council sat for the first time since mayor Thapelo Amad and his executives took power.

Last year, the Democratic Alliance-led coalition failed to convince the ANC, Economic Freedom Fighters (EFF) and minority parties to approve the loan, which would have assisted the city’s financial position.

The ANC, EFF and minority parties made a U-turn, tabling a motion to approve the loan as the city was in a “dire” financial crisis.

ALSO READ: City of Joburg council rejects Mpho Phalatse’s R2 billion loan request again

ActionSA caucus leader Funzi Ngobeni slammed the move calling it “stark hypocrisy”.

Ngobeni said on several occasions over the past year, the ANC and EFF attempted to block the approval of the R2 billion DBSA loan while the multi-party coalition, which included ActionSA, was in government.

He said roughly three weeks after the multi-party government was removed and replaced by an ANC and EFF coalition, the parties were now asking the council to approve the R2 billion loan.

“While the ANC, EFF and partners are willing to frustrate service delivery to serve their narrow political interests, we will fight hard to defend the interest of our residents,” Ngobeni added.

Suppliers owed

Finance MMC Dada Morero said they did not approve the loan last year because the multi-party coalition claimed the city did not have financial troubles.

Morero said when they came into office, they were shocked to find there was just under R400 million in the city coffers.

He said National Treasury required that the metro should at least have R1.3 billion in the coffers.

“We are raising this loan on the premise that we owe suppliers around R5 billion,” he said.

“We think this loan will give us caution for two months or so that we can sort out suppliers, especially small businesses, affected by non-payment.”

READ MORE: ‘City of Joburg will be able to repay loan’

Joburg Speaker Colleen Makhubele said they realised the DA-led coalition was lying to the public, officials and council about the real financial issues of the city when their coalition took power.

She said the multi-party coalition did not explain the real situation the city was facing in terms of its finances when they tabled the DBSA loan in council.

Joburg mayor Thapelo Amad said: “The loan will go a long way in stabilising the finances of the city. For example, the city does not clean up because Pikitup does not have a fleet, Johannesburg Metro Police Department does not have enough vehicles to enforce bylaws. Those are the priorities so our services are not on standby.”