The proposed 2025/26 Nelson Mandela Bay budget is not only unrealistic but also morally indefensible, as it passes the buck to ratepayers to fund the mismanagement of our inept ANC-led municipality.
Nelson Mandela Bay faces two crippling financial issues: firstly, its electricity department is projected to bankrupt the metro within the next three to four years. This year the municipality has already spent R600 million more on purchasing electricity than it received from sales to the public. The collapsed electricity department is projecting a record loss of R1.3 billion in the current financial year.
Secondly, the metro is haemorrhaging millions of rand due to its inability to spend grant funding. Over the last two financial years the ANC-led administration’s dysfunction has lost a staggering R900 million in grant funding meant to build roads, and water and electricity infrastructure.
This inability to spend is a crisis and, as of April this year, the municipality had only spent 38% (R752 million) of its R1.934 billion capital expenditure budget.
Against the backdrop of this continued mismanagement, the tariff increases in the budget are morally indefensible. Imagine losing money and then asking ratepayers to balance the books!
It is morally indefensible to increase electricity tariffs without a plan to turn the electricity department around. Non-revenue electricity losses for the financial year ending March 2025 stood at R1,049 billion. The metro’s proposed electricity tariff increase is 12.80%, marginally higher than the 12.74% increase from Eskom. It is therefore expected of ratepayers to pay more than Eskom requires for a service that incurs annual losses of approximately R1.3 billion.
Furthermore, the budget is unrealistic as it is based on overly optimistic assumptions regarding the collection rate. The average collection rate for the 2024/25 financial year to date is 72.15%, yet the 2025/26 budget assumes an unrealistic 76% collection rate.
Ward-based budgets are also a major concern as very little budget has been made available for certain wards. The DA believes every community has the right to a fair allocation of resources.
Fixing Nelson Mandela Bay is not rocket-science. In the 2022/23 financial year the DA proved that through financial prudence and good governance an unqualified audit, the first in the metro in 12 years, can be a reality.
The DA will continue to fight tooth and nail for you. Passing the mismanaged buck to ratepayers is simply unacceptable.
Let’s get Nelson Mandela Bay working again.