Phalatse confident in Joburg ability to repay R2bn DBSA loan

Phalatse confident in Joburg ability to repay R2bn DBSA loan

Johannesburg Mayor Mpho Phalatse has again made a call for council to approve the report needed to secure a R2 billion short-term loan from the Development Bank of Southern Africa (DBSA).

Mayor Phalatse presser
Masechaba Sefularo

This comes as minority parties accuse the DA-coalition government of plunging the city into financial crisis.

Council rejected the loan while demanding the multi-party government detail how it would repay the loan.

“What our political opponents are doing can best be characterized as opposition for the sake of opposition. We will once again request council to adopt the report that gives effect to the R2 billion DBSA loan.”

Phalatse’s stressed the city is in a position to fulfill its repayment obligations.

“Despite the claims doing the rounds in the past few weeks the city is in a position to honour its loan repayments. As it stands today the city’s sinking fund, which is the fund set aside to repay loans and bonds, is adequately funded for the next three years.”

The city has failed over the last three years to meet revenue collection targets, but Phalatse says through campaigns such as Buya Mtheto, which has seen electricity to some inner city and government buildings cut off, the city is intervening.

While he admits failure to secure the loan may put the city in an “uneasy” state of finances, city CFO Sinovuyo Mpakama has dismissed claims of a fiscal crisis.

“…I do want to clarify that does not translate to the city being in financial crisis in anyway. The consequence of the loan not being passed is that the city may run the risk of not meeting liquidity requirements. But, in so far as the key expenditure that the city incurs the treasury department in the city has come up with a plan to ensue these a prioritized - these included bulk purchases, salaries, finances cost…”

If approved, Phalatse says the loan would be repaid by June 2023.


Listen to more local news below Jacaranda
Jacaranda FM

Show's Stories