Treasury’s funding freeze warning alarms Joburg residents
The situation in the City of Johannesburg is nothing short of explosive (“What’s in Godongwana’s letter? Minister threatens Joburg’s R8bn lifeline”, May 7).
News reports point to worsening financial instability, severe liquidity pressures, possible violations of the Municipal Finance Management Act (MFMA), and serious governance failures. The warning from the National Treasury about freezing funding should send shockwaves across all political structures within the council.
Irregular financial reporting, inconsistencies in line items across entities and repeated financial blows have now placed nearly 6-million residents at risk. When a metro of Johannesburg’s size faces potential funding constraints it is not politicians who suffer first — it is ordinary residents who depend on basic service delivery.
This crisis did not happen overnight. It is the result of sustained mismanagement, weak oversight and political instability.
All political parties represented in council must take collective responsibility. Accountability cannot be selective. Governance is a shared duty and so is the blame when systems collapse.
Johannesburg cannot afford further deterioration. What is required now is transparency, decisive corrective action and ethical leadership that prioritises residents over political survival.
The residents of this city deserve stability, accountability and responsible financial management.
Tsepo Mhlongo
Orlando East
Property prices affect business relocation decisions
Kevin Allan develops an interesting argument about the importance of functional local government to business location decisions and productivity (South Africa’s economic fate hinges on municipal performance, May 5).
It matters greatly whether essential municipal services are delivered reliably and regulatory processes are efficient. However, his theory of positive cycles of growth in functional localities and vicious cycles of decline in dysfunctional areas neglects the offsetting effects of rising property prices in buoyant areas and falling values elsewhere.
This will tend to dampen the extent of relocation. Business relocation decisions are also subject to considerable inertia because of the disruption and cost.
Unfortunately, Allan quotes only one example of an actual business relocation. We need much stronger evidence of this phenomenon before reaching conclusions about how significant it is.
Prof Ivan Turok
NRF research chair: city-region economies, University of the Free State
Why the hysteria over the high oil price?
Peter Bruce’s most recent column refers (“Leaders silent as crisis tests SA’s economic resilience”, May 7).
What remains perplexing for those of us “not clever enough” is why the hysteria this time over the high oil price?
Obviously, elevated oil prices are inflationary, but the way this is framed is as if this has triggered some sort of global Armageddon. It isn’t true. It can’t and it will pass.
Oil prices have exceeded $80 a barrel no fewer than seven times in the past 15 years. In 2011 the Arab Spring triggered high prices, and in that year average prices were about $110. These disruptions continued on and off through 2014.
In 2018 a spike saw prices of more than $80. Then came the post-Covid bottlenecks and the Russian invasion of Ukraine, covering 2022-24, with prices hitting $100. Today it’s $102 and near-term forecasts suggest perhaps $90.
Yes, of course the oil price could blow out above $125 per barrel, but then any number of global shocks could do the same. We need to be extremely sceptical when people blame the oil price for some dramatic shift in prices or growth or inflation.
Given the frequency of oil price shocks one would think that business (and countries) have hardened their supply chains to these movements.
Possibly a more telling explanation is that governments, including ours, love to tax fuel. It’s largely “hidden”, but it has the effect of significantly magnifying the effect of any price movement.
Perhaps we should turn our gaze to this and not obsess so much about the US president’s next move.
Martin Neethling
Via Business Day online
Apex court used by politicians to target Ramaphosa
No-one would wish to be in the shoes of the Constitutional Court judges, who are now being used by Julius Malema and the EFF to get their pound of flesh from President Cyril Ramaphosa (“Phala Phala ruling could reshape Ramaphosa’s fate”, May 7).
People who have done real damage to this country, like those who were at the forefront of the corruption that has brought this country to its knees, are aggressively working against those who are trying to rescue the country from collapse.
While politicians in other countries strive for the betterment of their countries, our politicians are preoccupied with strategies that seek to sink this country.
Cometh Dube-Makholwa
Midrand
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