eThekwini Municipality faces backlash over R1 billion in unspent grants
Ratepayers and opposition parties in the eThekwini Municipality are outraged over the revelation that the municipality has failed to spend R1 billion in allocated grants. This was disclosed in a recent meeting by the City’s finance committee.
Opposition parties stated that these funds were specifically allocated to address the City’s urgent infrastructure and service delivery needs. One described the failure as an indication of a “don’t care attitude” by staff, while ratepayers expressed concerns about the competence of senior managers in the municipality.
The Mercury has seen a portion of the report detailing the City’s investments and other financial matters regarding the issue of grants. It stated that as of 31 May 2025, unutilised capital and operational grants stood at R1.032 billion.
DA councillor Thabani Mthethwa described the revelations as alarming. “The DA is calling for the dismissal of City Manager Musa Mbhele following the latest revelation that the municipality has failed to spend over R1 billion in conditional grant funding. These funds were allocated specifically to address the City’s urgent infrastructure and service delivery needs,” he stated.
The information emerged during a Finance Committee meeting held recently, where the DA highlighted significant underspending on key grants. Grants such as the Urban Settlements Development Grant and the Informal Settlements Upgrading Grant remain severely underutilised, despite continuous pleas from communities for better housing, functional roads, and access to basic services.
“This ongoing failure to spend allocated funding raises the serious risk that the municipality will be forced to return the money to the National Treasury. Such a scenario would only deepen the suffering of communities already affected by poor service delivery. The lack of progress is not due to a shortage of funds but a failure of leadership and implementation,” Mthethwa concluded.
IFP councillor Jonathan Annipen echoed similar sentiments, stating that the failure to spend grants indicates a “don’t care attitude” by officials. “The eThekwini Municipality relies on grants to carry out essential functions. The failure to spend these grants is an indication of poor planning by city officials. Remember that the grants are allocated for specific functions, and we know that as of May, more than a billion rand of these grants had not been spent,” he said.
He further explained that the failure to spend the grants is compounded by other problems, including poor contract management, where projects undertaken are not completed on time, and slow supply chain processes.
“The municipality would have to apply for a rollover of these grants; however, if they do, the grants are brought back as a loan, meaning that these must be paid back. And who is going to pay those back? It is the same ratepayers, the same ratepayers who are paying the officials to manage the municipality, the officials that are failing to plan properly,” he added.
The eThekwini Ratepayers and Residents Association (ERRA) leader Ish Prahladh stated that the biggest issue is incompetent heads and staff.
“They have no forward planning, and just getting paid to sit in their offices is not going to improve service delivery. Most importantly, the workforce on the ground should be competent and forward service delivery issues to their respective offices and the respective heads.”
The office of the mayor said they aimed to spend 95% of the grants.
It directed The Mercury to a recent address made by mayor Cyril Xaba to councillors.
“Colleagues, in all our engagements I have been constantly emphasising the issue of strengthening oversight on performance and accountability. As the political leadership, we must all be seized with this task not only at EXCO level, even in our portfolio committees. I (recently) convened a special EXCO and extended the invitation to the Executive Directors and Directors to receive the report on the expenditure to date. The capital spend was reported to be below 75%, as at the end of May,” Xaba said.