Note to Editors: Please find attached English and Afrikaans soundbites by Cllr Erica Moir and Sesotho soundbite by Cllr Diphapang Mofokeng.
The DA did not support the resolution authorising Mantsopa Local Municipality to apply for a R10 million overdraft during the Special Council Meeting on 27 July 2026, citing the municipality’s worsening financial position and the lack of information provided to justify the application.
During the meeting, DA Councillor Tim Mpakathe questioned why Council had not been provided with an estimate of the total borrowing costs, including interest and bank charges. While the Mayor argued that interest could not be estimated because rates fluctuate, the DA maintains that Council cannot make informed financial decisions without understanding the likely cost of the debt based on prevailing interest rates.
The Mayor also stated that the municipality has applied for overdrafts annually for about the past 10 years and has repaid them. However, the DA pointed out that Mantsopa’s financial position has deteriorated significantly. National Treasury has already temporarily withheld certain funding because the municipality has failed to meet the conditions required for its release.
We further reminded Council that similar concerns about transparency were raised during last year’s overdraft application. At that time, requests for a detailed breakdown of how the funds would be spent were met only with references to the municipal Budget Speech. The DA argued that this is inadequate, as an overdraft is a separate borrowing facility that creates additional debt and does not form part of the approved municipal budget.
We requested a separate report detailing exactly how the R10 million would be spent, the repayment plan, and the total expected borrowing costs, including interest and bank charges. In response, the Mayor said the overdraft would be used as needed to provide services to residents. While the DA supports service delivery, it believes this explanation lacks the transparency required before approving additional borrowing.
The DA also questioned whether the overdraft is intended to pay outstanding creditors to help the municipality meet National Treasury’s compliance requirements and unlock withheld funding. If this is the case, residents deserve full disclosure on the purpose of the borrowing, which creditors will be paid, the expected outcomes, and how the municipality intends to repay both the capital and interest.
We remain committed to responsible financial oversight and will continue to insist that decisions involving public funds are supported by transparent, credible financial information.
Residents have the right to know why additional debt is being incurred, how the money will be spent, and how it will be repaid without placing further strain on the municipality’s already fragile finances.