More woes for Nelson Mandela Bay as Treasury threatens to halt funds over alleged transgressions

Nelson Mandela Bay city hall in Port Elizabeth on June 20, 2018.
Nelson Mandela Bay city hall in Port Elizabeth on June 20, 2018.
Lulama Zenzile/Gallo Images/Netwerk24
  • National Treasury says it will withhold Nelson Mandela Bay municipality grant funds if the City fails to comply with its recommendations.
  • Treasury says the metro must elect a new mayor.
  • If the municipality does not comply with Treasury's recommendations, a grant of R800 million is in jeopardy.


National Treasury has cracked the whip, warning the Nelson Mandela Bay municipality that it will withhold the transfer of grant funds because of a litany of alleged transgressions and the flouting of the law.

News24 has seen a letter from Treasury deputy director-general for intergovernmental relations, Malijeng Ngqaleni, in which the metro was lambasted for a failure to table and adopt the 2020/21 budget and the draft Integrated Development Plan (IDP) in line with Sections 16(2) and 24(1) of the Local Government: Municipal Finance Management Act.

In the letter, dated 29 June, Ngqaleni listed allegations of several transgressions by the municipality and its council, including the serious and persistent breach of prescribed measures in Section 216(1) of the Constitution.

Ngqaleni added that this was a reflection of weak and poor governance on the municipality's part.

"In addition to non-tabling of the 2020/21 MTREF (Medium Term Revenue and Expenditure Framework) budget, the following points confirm that the municipality is still faced with governance and institutional challenges and that warrants National Treasury to exercise its oversight role, and concomitantly implement remedies provided for in line with the Constitution and any applicable legislation."

The instabilities National Treasury referred to include:

  • political and administrative instability within the municipality reflected in the consistent failure by the council to meet;
  • that the municipality has been operating under the leadership of an interim mayor for six months;
  • the appointment of Mvuleni Mapu as acting City manager was irregular and unlawful due to non-compliance with Section 82 of the Municipal Structures Act;
  • the implementation of Deloitte and Touche recommendations; and
  • that the municipality did not implement any of the National Treasury recommendations to give effect to Municipal Regulations on a Standard Chart Of Accounts regulations.

"Given the above challenges, National Treasury considers it necessary to protect public funds by invoking Section 216(2) of the Constitution, read together with Section 38 of the MFMA (Municipal Finance Management Act), by withholding the transfer of funds which entails equitable shares and the conditional grants to Nelson Mandela Bay Metro, envisaged in Section 38(1)(a) and (b) of the MFMA."

READ MORE | Nelson Mandela Bay: Govt should consider Level 4 for metro, says acting mayor

Ngqaleni said he was giving the metro an opportunity to make written representations on the intention to stop the funds.

Court challenge

The DA said it intended to take the council to court after the passing of the City's budget, alleging that the budget and the appointment of Mapu on Monday were pushed under questionable circumstances.

DA provincial leader Nqaba Bhanga said the council's actions put the municipality at risk of losing more than R800 million in grant funding from National Treasury.

"The tone was set from the very beginning when DA councillors were denied access to one of the venues that was allocated for today's council meeting. The DA, as the biggest party in council, was only allocated one representative to take part in the physical sitting with the speaker. This while the ANC was allocated 12 seats, the UDM two and one [for] each of the ACDP, PA, UF, AIC and COPE."

Bhanga added that once the meeting was under way, there was no opportunity for the DA or other parties to interrogate and debate the budget."

"There are very specific requirements set out in law, relating to voting for individual budget items. These were never voted on separately and would certainly affect the lawfulness of large sections of and specific items in the budget. Mapu was also appointed as acting City manager although he does not possess the necessary skills, expertise, competencies, and qualifications legislation prescribes for this position," he said.

Accountability and service delivery compromised

News24 asked the ANC's regional task team co-ordinator, Luyolo Nqakula, for comment but he said only provincial secretary Lulama Ngcukayitobi could comment. Ngcukayitobi was not available.

Cooperative Governance and Traditional Affairs (Cogta) Minister Nkosazana Dlamini-Zuma ordered Eastern Cape Cogta MEC Xolile Nqatha to urgently investigate the mayoral vacancy in Nelson Mandela Bay, News24 previously reported.

In a letter to Nqatha, dated 6 June, Dlamini-Zuma said a report must include time frames for the filling of the mayoral vacancy, as well as measures to ensure voting takes place by secret ballot, should there be no candidate elected for the position.

The metro has been without a mayor since the UDM's Mongameli Bobani was booted out through a vote of no-confidence in December. Bobani was removed after his alliance with the ANC and the so-called Black Caucus fell apart. His removal led to a vacuum in the City, forcing the ANC to vote in his deputy, Thsonono Buyeye, as acting mayor.

National Treasury said in its letter that although the Municipal Structures Act provided for the deputy mayor to act in the position of a mayor in the absence of the latter, this was never intended to be perpetual.

"If challenged, a competent court may interpret this as irregular. This constitutes poor governance which might be irregular action by the municipality when one applies contextual and purposive approach to the interpretation of the relevant statutory provisions. The vacancy in the position of the mayor also compromises accountability and service delivery to the community, particularly the budget processes," National Treasury wrote.

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