GOOD Statement by Suzette Little, GOOD Deputy Secretary-General & City of Cape Town Councillor:
The GOOD Party is deeply concerned by the Executive Mayor’s dismissive response to serious allegations of financial misconduct arising from the City of Cape Town’s R2.1 billion loan agreement with Agence Française de Développement (AFD).
Rather than addressing the legal and procedural violations we have raised, the Mayor has chosen to deflect accountability with irrelevant and frankly unserious comments. This matter is not political point-scoring, it is a question of compliance with national legislation, protection of the City’s finances, and transparency to residents who ultimately foot the bill.
Despite our formal written complaint dated 30 July 2025, the matter has not been tabled before Council, not been referred to the Municipal Public Accounts Committee (MPAC), and no internal or independent investigation has been initiated. This is a clear and unacceptable breach of the Local Government: Disciplinary Regulations for Senior Managers.
The City borrowed in euros, then converted the loan into rands, resulting in an R116 million overrun due to exchange rate fluctuations. This violates Section 47(a) of the Municipal Finance Management Act (MFMA), which prohibits debt that is “indexed to, or affected by, fluctuations in the value of the Rand against any foreign currency.”
No evidence has been presented that the City hedged this currency risk through forward exchange contracts, despite this being flagged by the National Treasury and by the City’s own Audit and Performance Audit Committee.
The final disbursement of R2.116 billion exceeded the approved R2 billion borrowing cap without an adjustment budget in place at the time of drawdown. This is a direct contravention of Section 15 of the MFMA.
Council approved the loan without a clear list of capital projects to be funded undermining the requirements of Section 46(1)(a) of the MFMA.
The City Manager, as the Accounting Officer, is ultimately responsible in law for ensuring full compliance and transparency, irrespective of who signed the loan agreement.
As GOOD, we have formally reported the matter to the Auditor-General of South Africa (AGSA), requesting an investigation into whether the loan constitutes unauthorised, irregular, fruitless or wasteful expenditure under the MFMA. In July 2025, the AGSA acknowledged receipt and confirmed the matter had been referred to the relevant business unit. We will continue to follow up and demand action from oversight bodies.
The residents of Cape Town deserve financial transparency, not evasive excuses. This is public money, and it must be managed lawfully, not gambled on unstable exchange rates in breach of national law. If the Mayor and the City Manager believe no wrongdoing has occurred, then they should welcome a full, independent investigation.
We call on the Speaker and all Councillors to do what is right and lawful and bring this matter before Council, investigate it thoroughly, and protect the residents of Cape Town from further exposure to financial risk.
GOOD Manifesto on Vision for the Future: Envisioning a South Africa where all citizens can thrive.
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