Nelson Mandela Bay set to lose millions in grant funding

Note to Editors: Please find attached soundbites in English and Afrikaans by Cllr Retief Odendaal.

The Nelson Mandela Bay Municipality runs the risk of forfeiting hundreds of millions of rand to National Treasury due to an inability to spend its budget.

Over the last two years the Metro was forced to surrender R500 million to National Treasury.

Capital expenditure for the 2021/22 financial year stood at only 67%. The Metro only managed to spend R1,046 billion of its R1,562 billion capital budget.

During the 2020/21 financial year the Metro forfeited R319,6 million in grant funding. In 2019/20 R188 million in grant funding was forfeited to National Treasury.

NMB now runs the risk of once again forfeiting hundreds of millions of rand as we have incurred record underspending of conditional grant funding in the past financial year.

When comparing this to capital expenditure during the financial years 2016/17 (92,2%) and 2017/18 (98,42%) , it becomes clear that the current ANC-led administration has no control over the finances of the Metro.

During the two stipulated years NMB achieved some of the highest conditional grant funding spent in the country and was rewarded additional Urban Settlement Development Grant (USDG) funding by National Treasury to the amount of R378,8 million.

Poor project management as well as poor financial controls are to blame for the record underspending that we have seen during the past year.

Adding to these financial woes, the collection rate has dropped to 75,67%. If not addressed immediately, the poor collection rate may lead to cashflow problems in future financial years.

The DA and its coalition partners will have a plan to get Nelson Mandela Bay working again.

Our plan to ensure that we timeously spend capital budget would include:

  1. Capacitating Supply Chain Management.
  2. Dual funding model for all large capital works projects.
  3. Credible procurement plans for all capital works projects.
  4. Weekly expenditure reporting to directorates.
  5. Weekly cash flow reporting to directorates.

Let’s take our future in our hands and get Nelson Mandela Bay working again.