Minority opposition parties vow to oppose Joburg's proposed R2bn loan

Minority opposition parties in the City of Johannesburg on Monday vowed to to oppose a motion seeking approval for a R2bn Development Bank of South Africa (DBSA) loan. 

The DA-led multiparty government intends to table the motion at the council meeting on Friday.

The African Transformation Movement (ATM), Congress of the People (COPE), Al-Jama, United Independent Movement (UIM) and Pan African Congress (PAC) — collectively known as the minority opposition block — slammed the multiparty government's handling of the city’s finances. They accused it of single-handedly destabilising the city’s coffers.

Adviser to the minority parties Kevin Reddy (UIM) said a request for a R2bn loan was unheard of and indicative of the city's financial woes.

“The city never requires short-term loans. Even when the ANC-led administration took out loans, they were project based and long-term. Now, there is no project announced to justify this loan. Instead, it appears to be a quick fix to pay for the immediate financial obligations, such as salaries,” Reddy said.

Minority parties said in May when the budget was tabled by finance MMC Julie Suddaby, they had not supported it.

“The initial budget they tabled was biased towards the affluent areas of the city and did not prioritise the disadvantaged residents, which is what led to us rejecting that budget. Now that they are in a financial crisis, what makes them think we, the alleged ‘corrupt cabal’, will support their motion to get a loan to fix their mess?” Reddy said.

According to the minority opposition, the city has accrued debt of R22bn and is owed in excess of R40bn by businesses and residents in the city.

The minority opposition also expressed concern that a motion for approval by council for an additional loan was being tabled, despite the city not having a debt recovery plan, no revenue-strengthening proposals, nor an advancement in debt collection measures.

This loan is intended to be paid back to the DBSA by June 30 2023 and is subject to a fluctuating interest rate.

Another issue raised was the public spat between mayor Mpho Phalatse and speaker Colleen Makhubele.

The ATM’s Lubabalo Magwentshu said: “It is an ugly sight for our residents, whose main concern is service delivery, to be witnessing elected officials lambasting each other in public like this.”

Phalatse was removed through a motion of no confidence on September 28, which was later reversed by a court judgment.

Makhubele confirmed another motion of no confidence would be tabled against Phalatse on Friday.

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