Govt and World Bank to launch R55bn plan to improve SA's biggest cities
The aim of the $3 billion initiative is to improve infrastructure in eight major cities, reports Bloomberg News.
Johannesburg, South Africa. Picture: © Magdalena Paluchowska/123rf.com
The Money Show's Stephen Grootes is joined by Municipal governance specialist Miyelani Holeni.
The government, in partnership with the World Bank, plans to launch a R55 billion initiative to reverse the decline in services and infrastructure in eight of South Africa's biggest cities, reports Bloomberg News.
A loan of around R20 billion ($1 billion) will come from the World Bank, with the remaining R30-odd billion ($2 billion) provided in government funding.
The Bank told Bloomberg the plan 'consists of a new, targeted performance-based fiscal transfer' to the selected municipalities.
Municipal governance specialist Miyelani Holeni emphasizes the performance-based nature of the fund, as Stephen Grootes wonders if this capital injection for instance in a mismanaged city like Johannesburg, will even make enough of a difference.
Holeni describes the initiative as 'a great start' which will, however, require follow-on funding if we're looking at a 5-10 year period for renewal.
"It's a good beginning in terms of getting a fund of that nature if you consider the Capital expenditures (CapEx) of some of the larger cities like Cape Town as well as Joburg have a range of between 5-8 billion rand."
Miyelani Holeni, Municipal Governance Specialist
"If you spread the proposed R55 billion across the eight cities it's on average about R6.8 billion. You can see that's literally CapEx for one financial year, and would need more sustained funding to create the momentum with regards to improving the lot of the city."
Miyelani Holeni, Municipal Governance Specialist
The funds would at least a significant dent with regards to improving the state of the city and its core services like water and electricity, says Holeni.
"It's about improving those services that are going to return money into the kitty such that the residents and business are able to receive a reliable service and pay for it."
Miyelani Holeni, Municipal Governance Specialist
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