UMNGENI MUNICIPALITY PAYS OFF R10M DEBT WITHOUT IMPACTING SERVICE DELIVERY
UMngeni Municipality has been able to pay off a R10.4 million loan with the Development Bank of South Africa (DBSA), without impacting on service delivery.
The municipality had borrowed the money in 2008 as part of a plan to build municipal offices, according to a report tabled by acting chief financial officer, Baneli Msomi.
In the same report, she advised councillors at a meeting of the executive committee (Exco) that settling the loan would prevent the municipality from paying more interest.
She also explained that another R5 million, which had been set aside as security for the DBSA loan, would be refunded to the municipality.
Msomi was given the green light to repay the R10 448 435,13 owing to the bank, by both Exco and the full council.
The decision has saved residents around R450 000 in interest this year.
uMngeni mayor, Councillor Chris Pappas, praised councillor Pam Passmoor, the chairperson of the council’s finance committee, and the finance department for their work in securing the savings.
“We have no loans now as the debt has been paid off,” he said.
Since taking office in November last year, uMngeni Municipality
has also been able to increase the number of people, who qualify for free basic services, to more than 3 000.
This will, in turn, have a positive impact on municipal finances as uMngeni can now claim a larger sum of the tax revenue raised at national level by the South African Revenue Service, in terms of section 214 of the Constitution.
This money can be used to improve service delivery and for specific projects, which might otherwise need to be funded by loans.
DA KZN leader Francois Rogers praised uMngeni, as the first DA-run municipality in the province, for managing to pay off the loan and become debt free.
“When we went to the polls in 2021, the DA made promises to the voters of uMngeni that should the DA be elected to government, the municipality would show the residents of uMngeni and the province of KZN the DA difference.
“Under the governance of mayor Chris Pappas and his team, the DA has managed to wipe off all debt created by the ANC. This is 11 months into governance, saving residents R450 000 in interest this year.
“The savings of almost half a million can now be spent on service delivery for the residents of uMngeni.”