Despite facing an internal revolt from its coalition partners over its intention to borrow R600-million, Xolani Ngwezi, the mayor of IFP-led city council of Umhlathuze in Richards Bay in northern KwaZulu-Natal, insists there is nothing sinister about the pending loan, saying it was provided for by the Municipal Finance Management Act.
The IFP governs the council through a coalition with the DA with eight seats, the EFF with six seats, while the FF+ and the ACDP have a seat apiece. On the other hand, the ANC has 25 council seats, while the IFP has 24 seats.
The city is the second-biggest economy in KwaZulu-Natal after the eThekwini metro.
Ngwezi justified the loan, saying it was a necessary financial boost to roll out various capital projects to turn the city into KZN’s investment capital.
“The City of uMhlathuze is becoming the city of choice for living and investing, so we must respond to this demand. The loan is a process governed specifically by Section 46 of the Municipal Finance Management Act, which regulates how and under what circumstances a municipality can raise a loan.
“The loan was also approved by the council, so everything is above aboard,” said Ngwezi in an interview with the Sunday World.
The EFF is leading the charge, claiming the decision will collapse the municipality.
EFF provincial chairperson Mongezi Thwala accused the IFP of using municipal funds to fund its party-political programmes.
“Money has been wasted on useless functions, which were not speaking to societal issues of service delivery, but people are driven by narrow party interests and they are misusing ratepayers’ money.
“Taking a loan must be the last resort for any visionary leadership, and the municipality should have creative ways of collecting revenue instead of placing a burden on generations to come,” said Thwala.
Ngwezi also took time to allay fears that if the loan was not approved the municipality would struggle to pay its workers. “As long I’m the mayor, the workers will be paid.”
Last year, the City of Johannesburg, under the now ousted mayor Dr Mpho Phalatse tabled a motion seeking a R2-billion short-term loan from the Development Bank of Southern Africa, but the motion did not pass through council.
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