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Joburg mayor blames DA-led coalition for city’s financial woes

Joburg mayor blames DA-led coalition for city’s financial woes
Nonkululeko Njilo
By Nonkululeko Njilo
6 Jun 2023
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At the heart of Johannesburg Mayor Kabelo Gwamanda’s maiden State of the City Address on Tuesday were a bleak picture of the city’s finances, plans to reduce dependence on Eskom, and crime prevention efforts.

The City of Johannesburg, SA’s biggest-budget municipality, has been bedevilled by service delivery protests, violent crime, intermittent water and power supply, and revenue collection shortfalls, among other troubles which Mayor Kabelo Gwamanda tackled during his maiden State of the City Address on Tuesday. 

To a large extent, the mayor attributed the city’s failures to “unprecedented levels of instability”, particularly under the various DA-led multiparty governments, which he said had sought to settle political scores instead of serving the city’s more than six million residents.

Without outlining his performance metrics, Gwamanda claimed the government was performing at 66% at the end of the third quarter.

“While this number may not meet our initial expectations, it is essential to recognise the significant strides we have made despite the challenges that were inherited by the Government of Local Unity (GLU),” he said in his 20-page address.

Gwamanda was elected in May 2023 to replace fellow Al Jama-ah councillor Thapelo Amad. He was supported by the ANC, EFF and other minority parties.

At the end of June 2021, audited financial statements reflected a city with a healthy cash balance of R6.6-billion. However, this quickly dried up and  the city under the previous DA-led administration was nearly bankrupt, said Gwamanda.

“Upon our return in January 2023 when we took over from the multiparty government, we found a near-bankrupt municipality sitting with over R6-billion in unpaid supplier invoices,” he said.

Short-term loan 


Speaking to the media after the address, the MMC for finance, Dada Morero, confirmed the city’s precarious financial position. He said the GLU had approved a short-term loan facility to begin clearing the unpaid invoices by more than 80%. 

“We have pushed to reduce the amount to about R2-billion, correcting that debt and also ensuring that suppliers are not suffocated so that they can be able to continue with projects. Some of them had completely stopped,” said Morero.

Gwamanda admitted that the city’s current financial crisis left much to be desired and negatively affected its ability to render basic services to residents.

“The reality is that without a financially sound city, we will not be able to invest as required in our core municipal mandate of delivering basic services, ensuring the security of electricity and water supply, efficient roads infrastructure and the many other service delivery mandates that demand immediate attention.”

Reacting to the budget, newly elected DA Joburg caucus leader Belinda Echeozonjoku said Gwamanda had no plan and was “clearly out of touch” with what is happening in the city. She accused him of playing a blame game for attributing the failures of the city to the DA-led multiparty government.

“On the state of the city’s finances, he’s not alluding to the fact it is under the DA-led administration that we tried to bring stability by getting the R2-billion [Development Bank of South Africa] loan through the city,  which is one of the funding models and they have declined to support that.

“It is not true that the DA-led government bankrupted the city. In fact, the instability that they have caused as the ANC and its coalition partners is what has caused things not to function,” said Echeozonjoku.

Gwamanda was accused of being delinquent after only a month on the job, during which he failed to attend 17 scheduled integrated development plan (IDP) sessions. Speaker Colleen Makhubele wrote to chastise him, saying his non-appearance had undermined the sessions aimed at enabling service delivery.

Read more in Daily Maverick: ‘Delinquent’ Joburg mayor to deliver State of the City Address despite threat of motion of no confidence 

While he did not go into detail about his whereabouts, Gwamanda indicated that he had spent the past three weeks trying to understand the working mechanisms and the true state of the City of Johannesburg.  

“What we know now as fact is that the city’s finances remain strained,” he said.

Morero is expected to elaborate further on the city’s finances when he tables the 2023/24 budget on Tuesday, 13 June.

The load shedding threat


Also key in the mayor’s address was the impact rolling blackouts have on Johannesburg.

“Load shedding remains one of the biggest threats to the safety, security, economy and liveability of the city. Providing reliable and sustainable power supply to our residents and businesses in the city is one of the foremost priorities of the Government of Local Unity,” he said.

Read more in Daily Maverick: Johannesburg residents get a foretaste of what national grid failure feels like

Writing in Daily Maverick, Ferial Haffajee reported that City Power services 380,000 households and businesses out of a total of 1.4 million households in Johannesburg. Its grid needs a major overhaul that will cost tens of billions of rands as decades of underinvestment and poor maintenance are coming home to roost. 

Reducing dependence on Eskom


Gwamanda said mitigating the impact of planned outages by Eskom was a matter receiving urgent attention through City Power, but he did not give specific timelines of when this was likely to be achieved.

The city acquires 87% of its power from Eskom, while 13% is supplied by the privately owned Kelvin Power Station.

The mayor revealed that the council had recently mandated City Power to extend the power purchase agreement with Kelvin Power Station by another three years, ending in October 2026.

Gwamanda said the added power would be beneficial to residents, especially during the winter peak period. Working with the province, the mayor said he was determined to improve the energy mix and availability factor for the city and potentially the whole of Gauteng.

“We are engaging independent power producers to diversify our energy sources and ensure reliable electricity supply.” 

Citizens regularly have multiday power cuts as City Power battles to reduce a R9.11-billion overdraft. Councillors say the entity has lost R1.36-billion in the past three months as collections are down. It has been late paying contractors and suffered shortages of parts, extending the time of outages.  

Read more in Daily Maverick: Joburg coalition plans to blow R2-billion on tarting up its own offices as city services collapse 

Fighting crime


Gwamanda said the coalition government would also focus on citywide crime prevention, by-law enforcement, road-traffic management and emergency management services. The recruitment of more crime wardens was in the pipeline.

“A reimagined, resilient Johannesburg is one in which residents feel safe and protected at all times regardless of their gender or sexual orientation, regardless of their age or dress code, regardless of their vulnerabilities or level of security awareness.

“Our people must feel safe at times in this world-class African city. Fighting and defeating crime is a top priority for the Government of Local Unity. To bolster our efforts in fighting crime, we plan to recruit approximately 2,000 crime wardens in the City of Johannesburg.”   

This comes after Gauteng Premier Panyaza Lesufi’s announcement in April that 3,000 “crime wardens” would be deployed across the province to assist in the fight against crime and lawlessness. DM

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