Decision already relayed to Mayor Mxolisi Kaunda’s office with instructions to return funds, municipality to launch an appeal.
Durban - The National Treasury has vetoed R100 million due to the ANC-run metro as part of urban settlements development, citing underspending.
The grant is given to the country’s metros to acquire and develop urban land for informal settlement eradication purposes.
Despite being home to the largest informal settlements in the province and the country, the metro failed to utilise the funds accordingly and has to part with the budgeted funds.
The latest development highlights the spending conundrum within the municipality.
NEWS: More eThekwini municipality shortcomings exposed. The National Treasury has stopped R100 million which was to be given to the ANC-run metro as part of the urban settlements development grant due to underspending. The grant is given to metros to acquire and develop land pic.twitter.com/uwspzFaKtr
— Sihle Mavuso (@ZANewsFlash) April 7, 2023
The decision was communicated in a letter issued to Mayor Mxolisi Kaunda on Tuesday this week from Mmamoloko Kubayi, the Minister of Human Settlements.
Kaunda was asked to make arrangements to return the funds.
“The National Department of Human Settlements hereby confirms that the National Treasury has instituted section 18(1)(b) of Division of Revenue Act, No.5 of 2022 (DORA) which states that; "Despite section 17, the National Treasury may, in its discretion or on request of a transferring officer or a receiving officer, stop the transfer of a Schedule 4 or 5 allocation, or a portion thereof, to a province or municipality- if the National Treasury anticipates that a province or municipality shall substantially underspend on the allocation, or any programme, partially or fully funded by the allocation, in the 2022/23 financial year".
“The final decision by National Treasury has resulted in an amount of R100,000,000 being stopped from eThekwini Metropolitan Municipality.
“The Metro is hereby requested to submit a revised project list for the 2022/23 financial year post the reduction of the Urban Settlements Development Grant (USDG).
“Your response to the National Department is required within 10 working days upon receipt of this correspondence,” read part of the letter sent to Kaunda.
UPDATE: Here is the letter where Minister of Human Settlement, Mmamoloko Kubayi, told eThekwini mayor, Mxolisi Kaunda that they will lose R100 million of the grant to help the metro acquire land to eradicate informal settlements. The national Treasury is pretty clear why. @IOL pic.twitter.com/bV01clvejQ
— Sihle Mavuso (@ZANewsFlash) April 7, 2023
The city’s head of communication, Lindiwe Khuzwayo, said the municipality will appeal National Treasury’s decision.
“eThekwini has been spending 100% of the USDG grant for at least the past 5 years and we were planning to spend to 100% of the allocated funds by end of June this year.
“As at end of February this year we had already spent 54% of the initially allocated funds.
“We are surprised about the letter as we had recently written to the National Treasury and the Department of Human Settlements advising them about our plans to spend the 100% allocation as we have done in the past.
“It is unfortunate that funding is being withdrawn during the year instead of waiting for the year end and then taking appropriate action.
“eThekwini will be engaging the national departments further about this matter,” Khuzwayo said.
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