The ANC-controlled Mangaung Metro faces junk status after Moody’s rating agency said further downgrading would be considered if the municipality do not urgently get its household in order.
The Bloemfontein municipality is in truth already bankrupt with liabilities exceeding assets of nearly R1bn and with over R6bn of outstanding debt. In fact, Moody’s indicated on their website that the metro was downgraded to Ba3 status on May 2, 2019.
In their response, the metro says a downgrade won’t affect service delivery and a financial recovery plan is in place. They argue that the weak economy, rising unemployment and increased water and electricity tariffs are the setback to their finances.
Meanwhile, it appears that the metro’s salary bill amounts to about R160 million a month, with a mobile phone stipend of R3’200 for about 70 councillors, each. In terms of debt, business enterprises owe the metro R1,6bn, residents R3,2bn and government departments R1,2bn.
Bloemwater also reported that the metro owes them over R200 million. What is also very aggravating is that reportedly the metros computer network has collapsed to a large extent and that there are apparently no proper client records available.
– Read the original article in Afrikaans on Ditsem Nuus
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