CoJ fails to convince council of multi-billion Rand loan

Issued by Cllr Chris Santana – DA Johannesburg Shadow MMC for Finance
13 Jun 2024 in Press Statements

Today at the 27th Extra-Ordinary Council Meeting of the City of Johannesburg (COJ) the MMC for Finance brought a request to Council for a loan of R2.5 billion to be repaid over a period of 15 years. Unfortunately, the Item was brought to Council without supporting documentation.

The following are the concerns the Democratic Alliance (DA) raised in Council regarding this loan:

The item was tabled without the relevant documentation, and without adhering to the principles of good governance. Without the supporting documentation – specifically the 3rd Quarterly Reports and the Monthly Section 71 reports (especially the reports for April 2024) – it is ill-advised to make any decision regarding the loan.

Council has not been sufficiently informed of the financial standing of the city, bearing in mind that this loan will have a 15-year repayment period, it would be wholly irresponsible to even consider the proposed loan

There are no details regarding which, if any, Capital project this loan would fund if passed

As the loan is being sought from a foreign bank (Agence Francais De Developpement) the interest rate is particularly high, resulting in a total repayment of R5.7 billion over the 15-year repayment period. More than double the initial loan amount.

Considering the above, as well as the considerable risk for the CoJ to take on such an expensive loan under more than concerning circumstances, one can only ask what the executive was thinking?

The item fortunately did not pass, in order for a financial vote to pass in Council, there needs to be a majority of 136 votes for the item, which they could not achieve.

We found ourselves unable to support the loan in any way shape or form. This would boil down to irresponsible governance. Johannesburg finds itself in dire straits, under the leadership of a hapless executive.

It is clear that the CoJ is in fact leaderless. We will not rest, and we will continue protecting the best interests of residents in the city.