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The intention of the North West Department of Cooperative Governance, Human Settlements, and Traditional Affairs (CoGHSTA) to secure a R50 billion loan must be stopped in its tracks.

The DA notes with trepidation, reports that the department has applied for a R50 billion loan from the Development Bank of South Africa (DBSA). This loan is said to be used to deal with a backlog of incomplete housing projects in the province.

While the DA agrees that there is a need to deal with the backlog of incomplete housing projects, we must warn against doing so recklessly and demand that all factors be considered.

The mere fact that the application for the loan is on the eve of election rings alarm bells, leaving the repayment of the loan to the next elected government.

The inflated interest rates that will be charged by the DBSA will also have to be considered when deciding whether this loan is feasible. Servicing this debt will be unaffordable considering that the department’s entire annual budget is a mere R1,8 billion.

The fact is that the ANC-led North West Provincial Government’s attempt to secure this loan will put the province into a 25-year debt burden that the provincial fiscus cannot afford.

Reports indicate that the equitable share will be used to pay off this loan which will have a negative impact on the provincial government to fund all its service delivery and infrastructure development programmes. This will see the further collapse of service delivery.

Currently there are about 75 blocked housing projects in the North West, before the department could consider a R50 billion loan, it must disclose the status of these projects, the reasons for delays, and the consequence mechanisms it has invoked on defaulter contractors, departmental officials, and all those responsible for fraud and corruption. Housing beneficiaries also need to know what the status of completion is for the 5,409 units the department was supposed to build in the current financial year at a cost of R780 million.

The DA will today submit questions to the MEC of CoGHSTA, Nono Maloyi, to clarify the circumstances surrounding the loan. Another set of questions will be submitted to the MEC of Provincial Treasury, Motlalepula Rosho, to explain the rationale behind the loan, the modalities behind such a loan, and the reasons leading to Treasury approving such a preposterous request.

Upon receiving the responses, we will announce our next course of action. The days of comrades cushioning their pension exits using government funds are a thing of the past. The DA will use every tool at its disposal to fight off this loan request.

Issued by Freddy Sonakile - DA Spokesperson on Cooperative Governance, Human Settlements and Traditional affairs in the North West Provincial Legislature