Deputy Finance Minister, David Masondo, says he is confident that the five-member team which has been appointed to administrate the embattled Mangaung Metro will help to bring about stability. He says he is hopeful the team will help turn things around.
The Mangaung Metro was placed under administration in December due to governance failures and failure to implement a financial recovery plan.
The Metro has been downgraded twice by ratings agency Moody’s.
Moody’s downgraded the municipality again, just five months after downgrading it to B3.
Moody’s has now classified the metro as a high risk for investment, moving it to CAA 1. The rating agency has cited poor governance and management as the reasons for the downgrade.
It says the municipality has missed debt service payments on two loans worth more than R50 million.
The Mangaung municipality became the first metro in the country to be downgraded by a ratings agency.
Masondo says the latest downgrading is likely to impact on service delivery.
He says: “We are also concerned about the political instability particularly in the council, relating to governance. Committees are not meeting and if committees are not meeting it means that things are not processed and therefore they can’t deliver services and it shows very clear around service delivery issues.”
“We are concerned as the National Treasury and asked the premier to intervene and put a team together to turn the situation around.”
Meanwhile, a faction of the African National Congress (ANC) has called for a probe into allegations of financial mismanagement in the embattled Metro.
ANC Mangaung Region Task Team deputy convenor, Patrick Monyakoane, says there’s no end to problems plaguing the municipality and called for urgent investigations.
