City of Joburg granted R2.5bn loan from French Development Agency

Johannesburg

Johannesburg — The City of Johannesburg has agreed to accept a R2.5 billion loan from the French Development Agency (AFD) which will address the city’s financial difficulties.

The loan, which has been at the centre of controversy for several weeks, was rejected at a council meeting earlier this month, but political parties in Gauteng had a change of heart.

ActionSA, the African National Congress (ANC), the African Independent Congress (AIC), African Transformation Movement (ATM), Economic Freedom Fighters (EFF) and Patriotic Alliance (PA) in passing a resolution to approve the loan. The Good Party and Freedom Front Plus voted against it, The Citizen reported.

ActionSA had initially opposed the loan, saying it would burden Johannesburg residents in the next 15 years, but made a U-turn on the decision as it believes it will ease the city’s financial debt and emphasised the need to scrap the controversial R200 electricity surcharge.

“We would like to emphasise that in supporting the AFD loan, we do so with full recognition of the vital need to prioritise service delivery in Gauteng. ActionSA wants to see the City reclaiming hijacked buildings, law enforcement agencies addressing illegal immigration decisively, and, most importantly, the Mayor of Johannesburg, Cllr Kabelo Gwamanda, vacating his office,” ActionSA caucus leader, Nobuhle Mtehmbu, said in a statement.

The Democratic Alliance’s caucus leader, Belinda Kayser-Echeozonjoku said the party now agreed with the loan after “all the requisite information” was given “for the council to make an informed decision”.

“We note the city’s revenue enhancement efforts through the war room and also the monitoring that will be done by the Provincial Treasury on debt collection from Government departments and SOE who owe the City millions,” she said.

According to Member of the Mayoral Committee for Finance in the City of Johannesburg, Dada Morero, they will embark on an aggressive revenue collection campaign to ensure that the City can fund its projects. He said financial decisions are made with complete and accurate information, SABC News reported.

“We as councillors, we are as the City and the Executive today going to embark on an aggressive revenue collection process in an attempt to increase our collection rate, move from 86% to the 90% target, which will then ensure that this city can fund its capex projects and be able to support its opex expenditure,” he said.

“We are therefore making a call to the residents of Johannesburg to also play their part in ensuring that they pay for the services that are consumed on a daily basis,” adds Morero.

In response to the loan’s approval, Johannesburg Mayor, Kabelo Gwamanda, told KayaFM that the last-minute approval of the loan showed that political parties do not take service delivery seriously.

“The benefit that it’s going to bring to the residents is to first show that our political parties play games with their service delivery. We’ve tabled this report twice before and nothing has changed enough significantly for any political party to say they would like the money and it was worthy of being passed,” he said.

He said the money forms part of the overall funding model of the city and he was surprised that the political parties put their differences aside in the interests of the people.

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Compiled by Matthew Petersen

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