Cracks continue to appear in ANC/EFF Ekurhuleni coalition over state of city’s finances

31 Jan 2024

Other than Cape Town, Ekurhuleni was the only SA metro to receive a clean audit in 2022/23. However, councillors fear liquidity issues could cost the municipality its clean audit status — and coalition partners the ANC and EFF are on opposing sides of the debate.

The animosity between the ANC and EFF in Ekurhuleni appears to be deepening, with critical service delivery functions taking a knock and fears that the metro could lose its clean audit outcome status.

Ekurhuleni is the only metro other than Cape Town that received a clean audit from the Auditor-General (AG) in 2022/23. However, opposition parties say this does not reflect the reality and point to a worsening financial situation.

The ANC, which co-governs the metro with the EFF and other coalition partners, has expressed the same concern over what it dubbed a “liquidity risk”.

The metro, a key contributor to the economy of Gauteng and South Africa, was under the control of a DA-led coalition after the 2021 local government elections. In 2022, a marriage between the ANC, EFF and their allies saw a strong partnership in the council with a total of 117 seats against the DA’s coalition with 94 seats. The ANC and EFF embarked on a takeover of other metros, including Johannesburg, which the ANC lost to a DA-led coalition in 2021.

In Ekurhuleni, the ANC and the EFF each took control of five service delivery portfolios, with the EFF holding the crucial portfolio of finance, which is headed by EFF Gauteng leader Nkululeko Dunga.

‘Dire’ finances

The city’s 2023/24 quarterly reports tabled at a council meeting last week showed a slight improvement in the revenue collection rate for the second quarter, which ended on 31 December.

However, the council’s chief whip, ANC regional chairperson Jongizizwe Dlabathi, said this was a drop in the ocean as overall revenue collection remained low.

Dlabathi’s concern relates to the city’s cash on hand, which was R438-million in December, meaning the city had cash reserves for less than 15 days. National Treasury requires cash on hand for 30 days.

“The financial situation is dire. If there could be a crisis of revenue collection, the institution would not be able to fulfil some of the core service delivery obligations around water, electricity, sanitation and waste collection — that is a liquidity risk that we are sitting with,” Dlabathi said.

The EFF’s Tsogoane Mashianoke dismissed the concerns.

“Ekurhuleni has never had a financial crisis,” Mashianoke said. “If we had a crisis, we would not be able to pay workers. In fact, the report we received in council indicated that the finances have improved.”

The DA’s Fanyana Nkosi said the city was struggling with basic functions such as paying its suppliers on time, with some waiting for between three and six months.

“It is not looking good at all. If you owe suppliers, you still have a long way to go in terms of fixing service delivery, because without paying suppliers, you cannot deliver any services,” Nkosi said.

Ekurhuleni’s parlous situation was brought to light by the DA in 2022 when it called for a special council meeting to urgently debate the financial crisis, a call which was met with reluctance by the EFF.

Ordinarily, the AG’s report and an adjustment budget are tabled at the first council meeting of the year to provide councillors with an update on the metro’s financial position. However, that has not yet happened this year and some councillors believe it is a sign of trouble.

“Our office has written to the speaker asking where the report is, and what’s the hold-up. By this time, we should have received it,” Nkosi said, adding that there were concerns the metro could lose its clean audit outcome status.

Read more in Daily Maverick: Local government litany of woe — municipal decay and its dire consequences for service delivery

Although the EFF and ANC are coalition partners in Ekurhuleni, there have been cracks in the relationship for a while. In June 2023, Dlabathi penned a letter to the ANC’s provincial leadership asking that it reconsider the coalition. He warned that the ANC was at risk of losing its support base to the EFF if the coalition remained in place.

Little or nothing was done by the leadership. While the ANC National Executive Committee (NEC) has supported abandoning its coalitions with the EFF, the Gauteng ANC is reportedly reluctant to act.

Read more in Daily Maverick: Fractious ANC Gauteng on a go-slow to cut ties with EFF after poll support rises for Red Berets

Dlabathi could not be drawn into further commenting on the relations except to say his remarks were not personal.

“It’s not a relationship matter, it’s a competency matter because we are responsible for different portfolios. We have raised certain proposals as the ANC on how we can try to improve revenue collection, but they are not taken forward,” he said.

Operation Clean Audit

As far back as 2016, the City of Ekurhuleni initiated a turnaround strategy, Operation Clean Audit, for the city’s finances. The plan proposed a skills review of personnel in the finance department, monthly reconciliations of key accounts, stringent policy implementation checklists and an agile framework for responding to legislative developments.

Executive Mayor Sivuyile Ngodwana, from the African Independent Congress, this week sang the EFF’s tune and downplayed the concerns about the city’s finances.

“It’s a question that’s been bothering our residents for a while now. Yes, we need to improve our revenue collection efforts, but there is no crisis.”

Ngodwana has been in the hot seat for 10 months. Reflecting on his tenure, he said he had stabilised the metro and won back the trust of its more than three million residents.

“Our townships were neglected. I can boldly say we’ve ensured that waste collection happens frequently. We are on the right track. Yes, we do have challenges where you find that there is a delay in the payment of service providers, but I quickly intervene even in those situations. I can safely say we are on the right track.

“You cannot be 100% on everything. We still need to do more, but so far I am happy with the progress made by the people’s government.” DM

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‘Dire’ finances

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