ANC fails to secure €200m (R3.8bn) German loan for Joburg what it means for residents

Loan blocked in council vote what happened

The City of Johannesburg did not secure approval for a R3.8 billion loan from a German development bank after councillors failed to back the agreement in a council sitting this week. According to Citizen, the governing coalition in the City of Johannesburg failed to secure sufficient council support to approve a R3.8 billion loan agreement with a German development bank.

How the vote unfolded

Citizen reports that on Thursday the ANC and its partners failed to secure 136 votes from council, which could have enabled council to approve the loan. The Speaker, Margaret Sheron Arnolds, said another council meeting will be convened to put the loan back on the agenda and vote again, according to Citizen.

Why the ANC backed the loan

Mayor Dada Morero framed the loan as part of funding for City Power. According to Citizen, Morero told residents in his State of the City Address that the loan was meant to enable City Power to carry out its functions and insisted the city was financially stable.

ANC and coalition defence

Supporters within the coalition argued the loan would support City Power’s strategic plans. One ANC-aligned speaker said the loan was “affordable, … compliant, and … strategic” and characterised it as a vote of confidence from the German bank in Johannesburg. The loan was described by coalition supporters as funding that would benefit street lighting and other resident-facing services.

Opposition and concern over borrowing

Opposition parties raised strong objections to the reliance on borrowing to fund municipal services. ActionSA councillor Steven Nkonyeni warned that repeated loans risked disappearing into city coffers without sufficient accountability and demanded transparent reporting on all borrowing and repayments.

The DA and other opposition speakers painted a picture of financial strain at City Power, saying the utility’s bulk purchase costs exceed its revenue collections and that borrowing could increase debt-servicing pressure rather than solve underlying problems.

Coalition partner warns of consequences

The EFF, a coalition partner in the city, also challenged the mayor’s assessment of municipal finances. The party said continued reliance on loans requires clear explanation of long-term costs to residents, noting that every loan must be repaid with interest from future budgets.

What this means for residents

The immediate effect of the failed vote is procedural: the loan will be brought back to council for another vote. Beyond that, the debate highlights competing views on how to stabilise and fund City Power and deliver services.

Residents face two clear risks identified in the council debate: first, that borrowing could increase future budget pressures through debt-service costs; and second, that without faster operational reform, borrowed funds may not address structural problems at City Power that affect electricity reliability and other services.

Next steps

• Council will reconvene and vote again on the loan, according to Citizen.
• Political parties will continue to press for either the loan’s approval as strategic funding or for greater accountability and alternative funding measures.

For Joburg residents, the stalled decision keeps uncertainty over how City Power will be funded and how urgently needed repairs and services will be delivered.