As the ruling African national Congress continues battles it out with the DA on who gets hold of some of the major cities in the country, it is believed that the party could lose control of more than R130bn in city budgets.
The ruling ANC could possibly lose hold of the city budgets as political parties negotiate coalitions to govern four of the country’s biggest municipalities, including the capital, Pretoria and SA’s economic hub, Johannesburg.
The party had a major loss of support from 62.2 it obtained last two years, to 54.5 in the August 3 local government elections. The party was even relegate to the second-biggest party in the capital, Pretoria, where the Tshwane municipality oversees about R30 billion of the spending budget, and Nelson Mandela Bay, which includes the southern city of Port Elizabeth and manages about R11 billion, according to the cities’ budget documents.
The party lost outright majorities in Johannesburg, which has estimated expenditure of more than R50 billion, and its industrial hub neighbor, Ekurhuleni, with a city budget of about R40 billion.
Speaking on the possibility of the party’s loss of the city budgets, Ivor Sarakinsky, a senior lecturer at the Johannesburg-based University of the Witwatersrand’s School of Governance, said through phone on Wednesday that the R130bn “is a massive amount of money and it has ramifications in a whole range of areas,
All of these metros procure significant goods and services from private-sector companies and the supply-chain management systems that manage that procurement are going to be shaken up dramatically.” Companies which previously won certain contracts might no longer have access to those public tenders, he said.
ANC’s failure to retain hold of most of these metros has opened the door for it’s main opposition party, the Democratic Alliance, to try and form coalition governments in municipalities with smaller opposition parties, including the Economic Freedom Fighters (EFF) which has in turn refused to work with the ruling party.
“The money and the potential influence that goes with it is going to be a very important factor in the coalition talks,” Gary van Staden, an analyst at NKC African Economics in Paarl, said through phone.
“It’s big money. To get your finger into that pie is certainly going to play a role,” he added.
Meanwhile, the Economic freedom fighters (EFF) has maintained that it would not meet with the ANC leaders for any coalition except the party unseats its leader Jacob Zuma.