The eThekwini Municipality plans to borrow R1.5 billion to fund capital projects in the upcoming 2024/2025 financial year — a move that’s drawing concern from opposition parties and residents alike.
Municipal officials presented the borrowing proposal during an Executive Committee (Exco) meeting on Friday, noting that the loan would support infrastructure and development projects across the city. Two separate loans are on the table: R500 million from First National Bank and R1 billion from the Development Bank of Southern Africa, both to be repaid over 10 years at fixed interest rates of just over 10% and 11%, respectively.
Despite being commended by the National Treasury for maintaining a healthy cash ratio, the municipality’s growing debt load has not gone unnoticed. The city currently owes R9.9 billion in loan repayments, and according to eThekwini’s Chief Financial Officer Sandile Mnguni, more borrowing is on the horizon — another R2 billion next year, and R1.5 billion in each of the following two years.
“The R1.5 billion we’re borrowing now is for this year’s budget. The total debt doesn’t reflect repayments we make every six months,” Mnguni explained.
Still, several political parties — including the IFP, ActionSA, MF, PFP, and DA — abstained from voting on the proposal. Only the ANC voted in favor of the plan, allowing it to move forward.
Outside the council chambers, public dissatisfaction is growing. Rose Cortes, deputy chairperson of the eThekwini Ratepayers Protest Movement, criticized the municipality’s borrowing habits, calling them reckless.
“Ratepayers are growing increasingly concerned that the city is borrowing instead of cutting costs. Interest on a R1 billion loan is massive. The municipality should be focusing on austerity, not more debt,” Cortes said. “Ratepayers are effectively endorsing this behavior by continuing to pay their bills on time — maybe it’s time to rethink that.”
If the loans are approved at the next council meeting, City Manager Musa Mbhele will be responsible for signing off the agreements. The final interest rates will be locked in before the funds are withdrawn.
As the city continues its ambitious development plans, it faces a balancing act between investment and debt — one that will be closely watched by taxpayers and watchdog groups alike.