ActionSA strongly rejects Dada Morero’s plan to approve a R3.8 billion loan from German KfW Development Bank, to fund City Power. This superficial and frenzied attempt to repair the mismanagement of the City of Joburg’s finances will not improve electricity supply. Instead, it will entangle the residents to an unaffordable loan agreement over a period of 15 years.
The desperation of the ANC to approve this loan is alarming. A Special Council sitting has been convened to deliberate this matter today. Under no circumstances should councillors be strong-armed into approving this loan.
Of concern is the strange arrangement to approve this loan when Council hasn’t been presented with audited financial statements from 2024/25 year. By law, financials should be submitted to Council by the end of January and approved by end of February. This informs planning and considerations for the new financial year. It is astonishing that this has not happened.
It is clear that the city is under severe financial pressure over governance failures, liquidity concerns, and unsustainable commitments. The Auditor General and National Treasury have raised alarms regarding of the declining state of the city’s finances. The threats to the city’s financial stability are:
- Over R23 billion in unauthorised, fruitless, irregular, and wasteful expenditure;
- R6.8 billion owed to Eskom that will lead to widespread power cuts;
- R71 billion debt from weak revenue collection due from residents, businesses, and government departments;
- An unfunded R10 billion wage agreement with unions that National Treasury has instructed the city to halt.
All these reveal the extent of incompetence and negligence of the current leaders who place future generations of residents under debt burdens.
ActionSA has been clear that residents should not bear the brunt of irresponsible leaders. In 2024, our councillors rejected the City’s proposed R2.5 billion AFD loan on the basis of protecting residents who are already financial strained from the high cost of living.
There are serious long-term risks associated with any foreign-funded loan agreement, more so this particular agreement. Official records from Council state that the City Manager is “authorised to negotiate and effect changes to the proposed loan agreement, should it be required to protect the City’s interest”. It is inevitable that the city will negotiate from a position of weakness as it is already insolvent.
ActionSA’s position has been clear over the years – Johannesburg does not have a financing problem, it faces a negligence and leadership problem of individuals who don’t have the competence to uphold basic governance and fiscal discipline to manage the city effectively. Residents of Joburg deserve a competent administration, not endless borrowing.
We urge all political parties to act in the interest of residents who have suffered enough over the years.
ActionSA will continue to demand accountability and responsible governance to ensure that Johannesburg does not become a symbol of collapse and dysfunction.
Dada Morero’s Proposed R3.8 billion Loan Will Plunge the City into Chaos
ActionSA strongly rejects Dada Morero’s plan to approve a R3.8 billion loan from German KfW Development Bank, to fund City Power. This superficial and frenzied attempt to repair the mismanagement of the City of Joburg’s finances will not improve electricity supply. Instead, it will entangle the residents to an unaffordable loan agreement over a period of 15 years.
The desperation of the ANC to approve this loan is alarming. A Special Council sitting has been convened to deliberate this matter today. Under no circumstances should councillors be strong-armed into approving this loan.
Of concern is the strange arrangement to approve this loan when Council hasn’t been presented with audited financial statements from 2024/25 year. By law, financials should be submitted to Council by the end of January and approved by end of February. This informs planning and considerations for the new financial year. It is astonishing that this has not happened.
It is clear that the city is under severe financial pressure over governance failures, liquidity concerns, and unsustainable commitments. The Auditor General and National Treasury have raised alarms regarding of the declining state of the city’s finances. The threats to the city’s financial stability are:
All these reveal the extent of incompetence and negligence of the current leaders who place future generations of residents under debt burdens.
ActionSA has been clear that residents should not bear the brunt of irresponsible leaders. In 2024, our councillors rejected the City’s proposed R2.5 billion AFD loan on the basis of protecting residents who are already financial strained from the high cost of living.
There are serious long-term risks associated with any foreign-funded loan agreement, more so this particular agreement. Official records from Council state that the City Manager is “authorised to negotiate and effect changes to the proposed loan agreement, should it be required to protect the City’s interest”. It is inevitable that the city will negotiate from a position of weakness as it is already insolvent.
ActionSA’s position has been clear over the years – Johannesburg does not have a financing problem, it faces a negligence and leadership problem of individuals who don’t have the competence to uphold basic governance and fiscal discipline to manage the city effectively. Residents of Joburg deserve a competent administration, not endless borrowing.
We urge all political parties to act in the interest of residents who have suffered enough over the years.
ActionSA will continue to demand accountability and responsible governance to ensure that Johannesburg does not become a symbol of collapse and dysfunction.