Wed. Nov 20th, 2019

Why the Nelson Mandela Bay Municipality “will lose R420 million” on Sunday

Nelson Mandela Bay municipalityThe current government of the Nelson Mandela Bay Municipality have committed a R420 million error, and it’s not likely they’ll get a reprieve.

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A failure to spend the allocated budget for the Nelson Mandela Bay Municipality could have a disastrous effect for the metro over the next financial year. The city is on the verge of losing almost half-a-billion rand, designated for projects that are meant to uplift the local community.

Essentially, the government which currently presides over NMB have not been spending all the money in the kitty. To the uninitiated, this may not seem like a bad idea. But there’s nothing frugal about the withholding of funds – it all comes down to a poor sense of organisation.

Why Nelson Mandela Bay is set to lose almost half-a-billion rand

The DA were booted out of office in Nelson Mandela Bay last year. The chaotic political balance of the city was disrupted even further when a party member defected from the local government, and the DA were forced out of power.

However, Mayor Mongameli Bobani’s reign hasn’t exactly steadied the ship, and it seems he forgot to do something important. Usually, any money that hasn’t been spent by a municipality within the past 12 months can be rolled over. But NMB doesn’t have a Chief Financial Officer.

The Treasury is highly unlikely to let the unspent R420 million ride, as there is seemingly no-one in place designated with the responsibility to oversee how it will be spent. The deadline to spend all this idle cash is Sunday 30 June – a target that has been described as “impossible”.

  • Only 63% of the Urban Settlements Development Grant (USDG) was spent, leaving a surplus of R330 million.
  • Not even half of the Integrated Public Transport System Grant (IPTS) was used (48%), wasting R90 million in the process.
  • In the 2016 and 2017 financial years, the DA had spent their full allocation and secured a further R373 million for NMB, according to the party’s figures.

Why won’t the money stay in the budget?

Leander Kruger is the DA’s NMB Spokesperson for the Municipal Budget and Treasury. He told us a bit more about the nightmare scenario, and how it will impact citizens in the Eastern Cape.

“The situation is made worse by National Treasury’s warning that they are highly unlikely to approve any rollover applications for unspent conditional grants should Council fail to appoint a permanent Chief Financial Officer before the end of the financial year.”

“The end of the financial year is on Sunday and it is impossible that the municipality will be able to spend the outstanding amounts by then. Grants are handed out nationally, and it’s now likely that R420 million will be subtracted from next year’s budget.”

Leander Kruger

Nelson Mandela Bay: Where will the money go?

As Kruger explains, that money won’t technically “go” anywhere. The R420 million will stay within the government’s coffers: As far as the Treasury is concerned, Nelson Mandela Bay has proved that their budget is too high, and they can therefore live without that chunk of money going forward.

The DA representative also revealed that he’d be writing to Eastern Cape Premier Oscar Mabuyane to request his urgent intervention in Nelson Mandela Bay. He wants the office to dispatch a unit that can monitor and assist municipalities with their expenditure.

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