DA votes Against ANC Coalition’s Adjustment Budget and puts Residents First
by Cllr Fana Nkosi — DA Shadow MMC for Finance in Ekurhuleni
and Cllr Alta de Beer — DA Member of Finance in Ekurhuleni
and Cllr Graham Gersbach — DA Member of Finance in Ekurhuleni
Date: 01 February 2021
Type: Media Statement
The Democratic Alliance (DA) in Ekurhuleni has sided with the frustrated residents of the City of Ekurhuleni (CoE) and voted against the proposed adjustment budget, presented by the ANC-led Coalition administration.
The City’s Financial and Performance Results for the second quarter of the 2020/2021 Financial Year paints a horrid image and reveals a worrying state of the financials, of the City, under the ANC-led Coalition.
The continuous weakening budget management practices, weak operating results and liquidity, under the leadership of the ANC appointed Executive Mayor, Cllr Mzwandile Masina, shows the lack of political will to deal with the financial crisis and turn the City around.
The ANC-led City, currently, has a 89.8% debt collection rate, year-to-date. This is nowhere near the National Treasury benchmark of 95%, as prescribed in the Municipal Financial Management Act (MFMA). With the actual debt at an alarming R18 billion, the City’s current ratio is less than 1.5, which raises a concern for the City to meet its financial obligations.
The DA is not amazed that the ANC-led Coalition City is, therefore, struggling to deliver services to our residents. The Lockdown crisis and the current pandemic has exposed the impact of decades of ANC maladministration in Ekurhuleni.
It’s no wonder then, that Moody’s Rating Agency downgraded the ANC-led City of Ekurhuleni to B1 Negative, perhaps one of the only metro’s to be downgraded to B1 Negative in the latest Agency rating. As the DA, we are not surprised and have been warning the ANC Executive, every quarter of the City’s poor financial health.
Moody’s Rating Investors in its report states that the credit profile of the CoE reflects its weakening budget management practices, weak operating results and liquidity, compared with that of its peers. On the scale of 1–9, with nine being the weakest, Ekurhuleni scored a nine on Liquidity Risk Controls and Financial Management. The DA also notes the comments from National Treasury, who are concerned with the ANC-led City’s accumulation of further debt.
The ANC and its Coalition partners have not implemented good financial decisions and placed the City in severe financial duress. Due to this conduct, the DA, could not support the ANC Adjustment Budget, as it doesn’t place businesses and residents, in Ekurhuleni first.
The 2020/2021 Adjustment Budget is mismatched to the needs of the residents:
1. +- R170 Million reduction in Environment Expenditure (Litter picking, Solid waste and Refuse removal)
2. +- R9 Million reduction in Health Expenditure (Employees and Health Supplies)
3. +- R30 Million reduction in Human Settlement Expenditure (Hostel facilities, Maintenance and Informal Settlements)
4. +- 160 Million reduction in Water & Sanitation Expenditure (Sewer Services)
5. +-60 Million reduction in Road & Stormwater Expenditure (Maintenance)
6. +-25 Million reduction in Energy (Street lights, traffic lights and general Electrical Maintenance)
While the ANC-led Coalition reduces the budget of much-needed service delivery focused departments, the City provides a R151 Million in Security costs.
The DA will always advocate for service delivery and the marginalized residents. It clear that the ANC-led Ekurhuleni government hides behind the slogan of “pro-poor” but continues to protect and honour the interests of the elite few.
As the DA, we cannot accept an Adjustment Budget, where the funds for critical service delivery are decreased, while non-critical departments’ budgets are increased. The residents and businesses need a capable government that is ready to lead.
The DA is ready to trim the fat and put the residents first. We are a capable government, ready and waiting.
Cllr Fana Nkosi
DA Shadow MMC for Finance in Ekurhuleni
Cllr Alta de Beer
DA Member of Finance in Ekurhuleni
Cllr Graham Gersbach
DA Member of Finance in Ekurhuleni