Gwamanda commends parties in Joburg council for passing R2.5bn loan

JOHANNESBURG - Joburg Mayor Kabelo Gwamanda has commended parties in the municipal council for putting their political differences aside to approve a R2.5 billion loan for the cash-strapped city. 

The loan has been earmarked for operational costs and capital expenditure as the city tries to stay afloat amid financial distress. 

READ: CoJ votes in favour of R2,5bn loan from French Development Agency

During a council meeting on Thursday, the Democratic Alliance (DA) and ActionSA voted with the African National Congress (ANC)-led coalition to adopt the much-needed loan. 

The R2.5 billion, which the City of Joburg has secured from the French Development Agency, is set to be repaid over a period of 15 years. 

Just over a year ago, the city took out another R2 billion short-term loan from the Development Bank of Southern Africa, which was repaid last month.

Gwamanda asserts there is no cause for concern regarding the city’s reliance on loans.

"This has always been the funding model of the City of Joburg, whereby it's dependent on three sources. One source is revenue that we generate in the city, the second source is grant funding from National Treasury and the third source being the loans that we take," said Gwamanda.

Gwamanda has assured Joburg residents the loan won’t affect their municipal rates and taxes in any way.