Finger-pointing over Tshwane’s ratings downgrade
Pretoria - The three political powerhouses in the Tshwane council are pointing fingers at each other after credit ratings agency Moody’s downgraded the metro, citing weak liquidity and its R9 billion wage bill.
Moody’s last week further downgraded the City of Tshwane’s long-term national scale rating from Aa3.za to Baa2.za, a downgrade of five notches.
MMC for Finance Mare-Lise Fourie slammed the ANC-led provincial government, accusing it of orchestrating the downward spiral by “illegally” placing Tshwane under administration last year.
Fourie said: “This was further proof of the impact and contribution to the financial ruin of the City by the irregularly appointed ANC administrators during 2020. This significant downgrade reflects the City’s negative operating results in the 2019/20 financial year and resultant weak liquidity position.”
The Gauteng High Court, Pretoria, later declared the placing of the metro under administration null and void, paving the way for the DA-led coalition to return to power.
However, ANC regional chairperson and opposition leader in council Dr Kgosi Maepa said the DA should learn to take responsibility for its failures in governance instead of blaming other parties.
Maepa said the DA administration had been running experiments in Tshwane. He said the evidence of this was the fact that it had appointed several mayors – Solly Msimanga, Stevens Mokgalapa and Randall Williams – since it took power from the ANC in 2016.
“All these years the ANC has been running as the opposition and now they want to blame us. It is clear these people do not know anything about governance. They cannot name just one project in Tshwane that they initiated and completed, just one. The Bus Rapid Transit system and free wi-fi were initiated by the then ANC mayor Kgosientso Ramokgopa. The Rooiwaal water treatment plant project is now handled with the national government.
“Where does the ANC come in on their high wage bill? That has nothing to do with the ANC.
“The DA needs to be voted out of power because they do not know what they are doing. Even their own old leaders are saying they were running an experiment. They ran experiments with several mayors here and that is something we have never seen before.”
MoAfrika Mabogwane, the EFF leader in council, said the DA administration needed to know that assuming a leadership role involved taking responsibility.
“The current administration needs to know that taking on the leadership role comes with taking responsibility.
According to Fourie, the downgrade will impact negatively on the City’s ability to access long-term capital funds for infrastructure improvements, particularly to disadvantaged communities.
“Since taking office in 2016, the DA-led administration consistently managed to improve the financial health of the City and Moody’s improved the long-term national scale rating from A1 with a negative outlook in 2016 to Aa2.za with a stable outlook in 2019. The writing was on the wall when Moody’s, already in September 2020, downgraded the City by one notch with a negative outlook. The latest downgrade indicates a far worse position than in 2016.” Fourie said revenue collections had since improved and an adjustments budget, approved by the council in February, had aligned expenditure to realistically anticipated revenue.
This conservative approach was again followed during the compilation of the draft budget for 2021/22, currently in the consultation phase. “The financial sustainability of the City is non-negotiable and every effort will be made to restore the financial health as quickly as possible. We urge residents to assist us in achieving this,” she added.
The office of Human Settlements, Urban Planning and Co-operative Governance and Traditional Affairs MEC, Lebogang Maile, had yet to comment.