Africa-Press – South-Africa. Residents of Johannesburg will have to wait another week to hear the details of the City’s finances.
On Thursday, Mayor Mpho Phalatse, Finance MMC Julie Suddaby, and MMC for Environment, Infrastructure Services Michael Sun held a briefing in response to the allegations made by the ANC’s Joburg office on Wednesday.
ANC regional chair Dada Morero, who held office for 25 days when Phalatse was ousted, said the city was on the verge of financial ruin and predicted that municipal workers would not be paid come January.
Phalatse denies this and said that although the City’s finances were “not in the best position”, the council was taking active steps to rectify this.
“So, the notion that there is anxiety about the payment of salaries is a fabrication; and that we cannot meet our financial obligations is a lie,” she said.
Morero had painted a very bleak future for Johannesburg, saying the bubble was about to burst on a financial crisis that would soon collapse the city.
“The City has been robbing Peter to pay Paul. Unfortunately, Peter is so broke he can’t be robbed anymore. The hands that are holding the city are on the brink of defaulting on major obligations such as delaying payments to major creditors like Eskom, the water boards and possible investors as they are dipping into the sinking fund to meet day-to-day liquidity requirements.”
He claims the DA-led multiparty government has made “overstated” budget assumptions that have put pressure on the City’s liquidity.
The regional ANC takes umbrage in what it believes is the under collection of revenue.
“The outcome of the… revenue underperformance against budget pronounced is itself a significant decrease in the cash balances of the city from R6.6 billion in June 2021 to R3.8 billion [in June 2022].”
Morero said the City requires a minimum budget of R4.3 billion a month to operate, and it underspent R762 million in grants at the end of the financial year in June.
This means the funding available is R1 billion, below what the City needs to perform at a minimum per month.
Phalatse said there was “little to no truth” in what was said.
“Much has been made about the finances of the city because, of course, that is where the attention of the corrupt is focussed.
Council
“There is little to no truth in what he said, in the main because the audited figures will be presented before council, as per legislation.”
The mayor said Morero should be more concerned about the delayed R2 billion short-term loan from the Development Bank of Southern Africa.
She claims Speaker Colleen Makhubele blocked the report from being served in council at last week’s sitting because the planning committee had not tabled it.
She added it was further delayed because the council sitting tabled for Thursday was cancelled.
The City cannot ask for the loan until it was before the council.
Suddaby said between July and December last year, R2.7 billion had disappeared.
“Between January and June 2022, another R100 million has dissipated – that’s 27-times less than the previous [ANC-led] government.
“Cash flow is an issue. The Development Bank loan [of R2.2 billion] was meant to come to the City before Morero took over the city.”
She said this loan would cover the R2.7 billion which “haemorrhaged out”.
Suddaby addressed the R762 million in underspent grants, saying that because the city manager and CFO posts had not been filled, they had not fulfilled the legal requirements to spend the grants and thus had to give it back to Treasury.
Another issue brought up by the ANC was that the Section 71 reports – the oversight of the municipal financial performance against its adjusted budgets – were overdue.
Suddaby said it was a historical fact that the Johannesburg Section 71 reports were always late in council but that this would change.
“In terms of the short-term loans and the specifics around loans to the city. We will give you all the details on Wednesday,” the finance MMC promised.
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