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Cash Crisis Looms for Nelson Mandela Bay

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Dear MyPE

The ANC-led Coalition of Corruption, and the self-styled interim mayor, Cllr Tshonono Buyeye, are driving Nelson Mandela Bay to financial ruin, as their defiance of National Treasury instructions has already seen just under R1,6 billion in funds being withheld.

The city is facing a looming cash crisis that could very easily lead to staff members going unpaid and not being able to pay for bulk service charges, if the impasse between the Metro and National Treasury is not resolved soon.

If this forfeited, residents could be facing horrendous double-digit rate increases over the next three financial years to recover the shortfall. This could cripple businesses and homeowners alike, and destroy jobs and investment in the metro.

National Treasury has not paid one cent of Conditional Grant Funding and Equitable Share over to the municipality since the beginning of January.

The breakdown of funds payable are:

  • An amount of R753,843 Million in respect to the 2019/20 financial year;
  • An amount of R839,117 Million in respect to the 2020/21 financial year.

While National Treasury is well within their rights to invoke Section 216 (2) of the Constitution to force an organ of state to comply with legislation, generally recognised accounting practices and/or Treasury regulations, the current situation is causing an adverse risk to the financial sustainability of Nelson Mandela Bay.

In response to a parliamentary question, Finance MEC, Mlungisi Mvoko, revealed that there are several damning reasons for withholding the funds, including, amongst others, complete governance failures; council overreach, and failure to implement the Forensic Investigation recommendations of a forensic audit report that had uncovered fraud and corruption within the IPTS-project.

What is inconceivable is that, as the city’s financial situation grows more dire daily, the ANC-led Coalition of Corruption have failed to act!

MEC Mvoko argues that the withholding of grant funding and addressing compliance matters could lead to improved Council and Administrative good governance, and the implementation of consequence management.

Clearly this has not happened and sadly, the failure to resolve this impasse will have far reaching consequences for the residents of the Metro.

Should the municipality be unable to meet its financial obligations, which is fast becoming a very real possibility, it will have a significant impact on the city’s ability to deliver basic services to residents.

It is for this reason that the Democratic Alliance has written to MEC Mvoko, to request that he instructs Provincial Treasury to urgently intervene, and to act as a mediator between Nelson Mandela Bay and National Treasury in an attempt to resolve the ongoing impasse.

The DA will make sure that good governance and accountability return to Nelson Mandela Bay, and that the public funds that have been entrusted to its care, are used to deliver services to the people rather than line the pockets of cadres.

Regards

Retief Odendaal

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