Nelson Mandela Bay is heading for a cash crisis with cash reserves now at its lowest level in more than a decade. Continued financial mismanagement, wasteful expenditure and an electricity department that has incurred financial losses of R1.5 billion last year are strangling the financial life out of our metro.
Just three financial years ago, the city enjoyed record cash reserves under a DA-led coalition. Today, those reserves have been decimated by the EFF’s reckless and politically driven mismanagement of the Budget and Treasury and Electricity and Energy directorates over the past two financial years.
Under the EFF’s financial chaos the city has:
- Lost R1.2 billion in conditional grant funding intended for water, electricity, sewerage, and transport infrastructure.
- A collapsing cost coverage ratio (cash on hand), falling from 5.24 months in the 2022/23 financial year to just 59 days today.
- An exploding debtors’ book, up by a staggering R7.5 billion, as fewer and fewer residents are willing to pay the city for services rendered.
The EFF must take full responsibility for the implosion of Electricity Directorate which has seen electricity losses increasing by 400% over the last three financial years. This directorate is now running at a loss of nearly R1.5 billion, severely threatening the financial sustainability of the municipality.
The Nelson Mandela Bay Council is set to debate the metro’s Adjustments Budget on Thursday, where the EFF will, no doubt, try to shift the blame for mismanagement onto struggling ratepayers.
The DA will demand that the ANC/EFF-run Council cut expenditure, end wasteful spending, and fund a turnaround plan to stop the electricity department from bleeding money.
The only way to halt this financial destruction is to remove the ANC/EFF coalition of chaos, which has clearly shown it has no idea how to run a city or deliver services.
The DA has consistently stated that the only way to get the city back on track is to restore professional skills to the administration. That is why it is so important to unite behind the vision of the DA and our mayoral candidate, Retief Odendaal.
Together we can get Nelson Mandela Bay working again.