The eThekwini Municipality’s proposal to borrow R2 billion for Integrated Development Plan capital projects in 2026 has been met with mixed reactions.
The eThekwini Finance Committee presented its report to the council on Thursday, outlining the timeline for securing the R2 billion loan.
This loan, described as an annuity loan, will be sought through a Request for Proposal (RFP) process, inviting lenders to provide long-term debt finance for the municipality’s capital budget for the 2025/26 financial year.
The committee report stated that the municipality will utilise a combination of bilateral long-term loans from commercial banks, Development Finance Institutions (DFIs), as well as bonds through the Domestic Medium-Term Note (DMTN) Programme.
Speaking at the council meeting, Alicia Kissoon, Democratic Alliance Ward 23 councillor, said that at the end of June 2025, the municipality has 19 existing loan agreements and a debt outstanding of R10.3 billion.
“To layer another R2 billion in new external borrowing onto this mountain is not strategic planning! When the debt service costs rise, every rand we pay to a lender is a rand we cannot spend on a functioning traffic light, a clean park, or an operational clinic,” she said.
Kissoon stated that eThekwini’s crisis is not due to a funding shortage, but rather a management catastrophe and internal failures. She referred to the water loss and what she termed revenue sabotage because of estimated billing.
“Our baseline water loss is already over 50% of our supply. Fix the pipes, stop the theft, and collect the revenue before you put your hand in the ratepayer’s pocket! You cannot simultaneously ask our residents to endure the infrastructure charge and then turn around and commit them to decades of repayments on a new loan. This is an act of staggering cruelty.”
Kissoon suggested that the municipality focus on alternative means of funding by aggressive debt collection, unlocking grant funding, and rooting out corruption.
“We must make the existing R10.3 billion we have already borrowed work for us first! I urge every councillor with a conscience to stand with the residents, reject this toxic culture of debt, and vote no on any new borrowing,” she said.
Zwakele Mncwango, ActionSA KwaZulu-Natal leader, said he was also concerned about the city’s ongoing challenges with irregular, fruitless, and wasteful expenditure, and the glaring absence of accountability for those responsible.
He said the report on borrowing R2 billion reflected a worrying financial trajectory.
“Before taking on further debt, the city must show fiscal discipline and hold accountable those officials responsible for financial mismanagement,” Mncwango said.
Henricus van de Ryst, a Freedom Front Plus councillor, said residents will still be paying for the loans for years to come.
He said the city should focus on collecting money owed from government departments and stop writing off billions in debts and irregular, fruitless, and wasteful expenditure.
“eThekwini currently pays R1 billion a year in finance charges on 19 existing loans from banks. You borrow when you don’t have cash and need to fund an investment that will earn more than the cost of borrowing. But borrowing to cover your regular budget — especially at high interest over 15 years — makes little sense,” he said.
