GOOD Statement by Suzette Little,
GOOD City of Cape Town Councillor & Caucus Chairperson
28 February 2025
The GOOD party condemns the DA for recklessly borrowing foreign money linked to the unstable rand… Again. The City of Cape Town has borrowed R2.8bn from the German Development Bank, KfW to finance “major electricity grid upgrades”. However, the loan is actually for €150 million (which was estimated at R2.8 billion on 4 November). There is no guarantee of the rand value over the 15-year duration of the loan.
In April 2023, the DA borrowed €100-million from Agence Francaise de Developpement. The council approved the R1.9-billion loan despite warnings from the Treasury and the Audit and Performance Audit Committee. By July 2023, the item was back before council, with the fluctuation of the rand, the loan had quickly escalated to R2.1 billion, an increase of R200-million.
There is nothing wrong with any Municipality applying for Foreign loans. However, the Municipal Finance Management Act, Section 47 clearly states that any debt incurred by local government must be in rands or must not be affected by fluctuations in the value of the rand against any foreign currency.
These loans are payable in 2038 and beyond, there is no telling the state of the rand, especially with the current geo-political tensions. The residents of Cape Town should not have to foot the financial burden for the City’s reckless borrowing.
Cape Town plans to spend an ambitious R39.5 billion on infrastructure from July 2024 – June 2027. However, projects have not been identified and attached to the loans, a key aspect of the legislative and policy intent that enables such borrowing.
GOOD also questions whether this large-scale investment will translate into tangible improvements in areas that need it the most and whether the City is prioritizing equitable development.
The GOOD Party has written to the Mayor to request a breakdown of projects, with assigned costings. As well as the geographical distribution of all intended projects.
We have requested drawdown summaries and balances of the current R3.5 billion Nedbank loan, R2.8 billion International Finance Corporation loan and the €100 million AFD loan.
The residents have already been burdened by the rising cost of living, their wallets are stretched thin. They cannot afford to pay for the City’s financial mistakes.
Media enquiries: media@forgood.org.za