Telling empowering stories, South Africans want to hear

Wednesday, 10 July 2024 11:52

City of Joburg council vote against AFD R2.5 billion loan proposal.

By Lehlohonolo Lehana.

The City of Johannesburg council on Tuesday voted against a R2.5 billion loan from the Agence Francaise de Development (AFD).

This is the fourth time where councillors debated about the loan but nothing fruitful came out of it.

Johannesburg is governed by a coalition comprising the African National Congress (ANC), Economic Freedom Fighters (EFF), Patriotic Alliance (PA), and other minority parties, distinct from the national unity government (GNU) that includes the ANC and Democratic Alliance (DA) but not the EFF. 

MMC of Finance Dada Morero proposed and asked the councillors to support the loan to keep the City afloat as well as ensure service delivery commitments were met.

Parties like the EFF, DA opposed the loan with concerns about how it would be repaid.

Morero, expressed disappointment with the EFF, a coalition member, for voting against a loan payable over 15 years. 

The City recently borrowed about R2 billion from the Development Bank of South Africa (DBSA) but the metro was already in a bad financial mess when it got approved.

The EFF said that the loan would hit the poor the hardest because the "interest was too much". 

ActionSA's Caucus leader in the city, Nobuhle Mthembu said they were adamant that the council cannot take a loan that will burden Johannesburg residents for the years to come.

"We believe that the City must emphasise collecting revenue from the numerous government and provincial departments that owe the City millions of rands, an amount roughly equal to the proposed loan. These departments are well known to the City," Mthembu said in a statement.

Meanwhile the speaker of the Council Margret Arnolds has ruled a debate over the R200 prepaid electricity charge in Johannesburg is not urgent.

Action SA on Tuesday requested a debate on City Power's decision to place the fixed fee from this month. But it was rejected by the speaker.

"The debate on the R200 surcharge charge is not urgent, on the basis that the executive mayor has been on various media platforms regarding the issue and also City Power has clarified the issue," Arnolds said.

The city implemented the charge along with a 12.7% electricity hike that has left many residents in a tight financial position.

The hike was approved by the National Energy Regulator of South Africa (Nersa) following City Power's application.

The city has been struggling with its finances and the surcharge was intended to provide revenue to fund Johannesburg’s investment into new electricity infrastructure and the maintenance of existing infrastructure.