ActionSA rejects City of Joburg’s AFD R2.5 billion loan proposal

Published Jul 10, 2024


ActionSA has again rejected the Agence Française de Développement (AFD) R2.5 billion loan, saying it will constitute a costly and unnecessary debt burden to residents for the next 15 years.

This is after the Johannesburg Council voted against the loan on Tuesday.

Their decision comes amid political squabbles between the Democratic Alliance (DA) and the African National Congress (ANC).

This is the fourth time where councillors debated about the load but nothing fruitful came out of it.

MMC of Finance Dada Morero proposed and asked the councillors to support the loan to keep the City afloat as well as ensure service delivery commitments were met.

ActionSA’s Caucus leader in the city, Nobuhle Mthembu said they were adamant that the council cannot take a loan that will burden Johannesburg residents for the years to come.

“We believe that the City must emphasise collecting revenue from the numerous government and provincial departments that owe the City millions of rands, an amount roughly equal to the proposed loan. These departments are well known to the City,” Mthembu said in a statement.

Parties like the DA opposed the load with concerns about how it would be repaid.

The City recently borrowed about R2 billion from the Development Bank of South Africa (DBSA) but the metro was already in a bad financial mess when it got approved.

This also led to uncertainty among workers on whether they would be paid or not.

Meanwhile, council Speaker. Margaret Arnolds dismissed the R200 prepaid electricity tariff, saying it was not urgent.

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