Council Speech by Mayor Geordin Hill-Lewis

25 May 2023

Today, the monetary policy committee will announce what most economists say will be a 50-basis-point hike in interest rates.

Madam Speaker,

Fellow City of Cape Town Councillors,

Honoured guests and members of the public,

Goeiemôre, molweni, as-salaamu alaikum, shalom, good morning

It is my pleasure to welcome here today a special guest from our closest neighbouring metro, the Mayor of Nelson Mandela Bay Metro, Retief Odendaal.

Mayor Odendaal and the coalition government he leads has done incredible work over the last nine months to begin to fix basic service delivery, to deal with a crippling Day Zero water crisis far worse than the one we faced, and to begin to turn around their City's finances.

We have watched with great admiration the Mayor's can-do attitude to every crisis he has faced, even getting down on hands and knees to fix office chairs in City Hall himself, to save money on buying new ones.

We are inspired by people rolling up their sleeves and tackling problems in South Africa, and refusing to allow state failure to stop them.

We congratulate the Mayor and his coalition team for bringing hope to the people of Gqeberha and the people of the whole Eastern Cape, and we hope this coalition team will remain steadfast in government for a long time to come.

I read there is a cynical attempt to oust this coalition government by a no-confidence motion to be debated tomorrow, and already purportedly supported by the doomsday coalition of the ANC and the EFF.

That motion is not in the interests of the people of Nelson Mandela Bay. It is only in interests of the politicians and cronies who would get their hands back on the cookie jar.

Any party supporting that motion tomorrow will be punished by the voters for stopping the incredible progress being made, and for putting that City back in the same hands of those who are responsible for all that is going wrong in South Africa today.

In my council speech this time last year, I said that we should brace ourselves for a 'winter of discontent'. And while it was a tough year, the truth is: we ain't seen nothing yet.

After two weeks of plummeting, yesterday evening the rand hit its all-time record low. It now costs R19, 23 to buy just one dollar – and we'll see if it plumbs new depths today.

Today, the monetary policy committee will announce what most economists say will be a 50-basis-point hike in interest rates. This means that, if you were paying R10,000 a month on your bond 12 months ago, you are now paying R15 650.

R500 of basic groceries this time last year costs R570 now.

The whole country is subject to an 18,5% electricity price hike, paying ever more for something that is available less and less.

And now we have an outbreak of cholera in the north of the country following critical failure to invest in water and sanitation infrastructure going back to 2005.

And why is this?

It is because we are living in a country where the national government has lost control.

It cannot keep food prices reasonable; it cannot protect people from criminals; it doesn't invest in critical infrastructure; it cannot grow the economy; it cannot create jobs; and it cannot keep the lights on.

Like many of you, I watched the ANC Secretary General Fikile Mbalula's interview on BBC's Hard Talk this week. If you didn't know better you would think that he was an innocent bystander watching the country crumple and buckle like a car crash happening in front of him.

Incredibly, the ANC Secretary General acknowledged that South Africa is becoming a failed state.

This is a shocking thing to say. The definition of a "failed state" is one in which "the state can no longer perform its basic security and development functions, where the state is no longer in control".

Now, apart from the fact that any political leader who goes on global television and says that the state in which he has played and continues to play a leading role in, is failing, should be immediately fired -- what was really remarkable about his comment is that he didn't take responsibility for it. Nor did he offer any solutions to fix the crisis.

It makes you wonder how his party wins even a single vote.

What a stark contrast this draws from the city of Nairobi, from where I've just returned from a brief but encouraging visit.

Nairobi is a city facing tremendous challenges of poverty, unemployment and crime, with its own history of racial segregation and oppression.

Yet it is a city on the move.

It is dealing with those challenges in fresh and exciting ways, and it is becoming a powerhouse.

Nairobi is ahead of Cape Town in ease of doing business, and in digital accessibility of its services. We can learn much from our colleagues there.

When we were considering which city we'd like the first city-to-city co-operation agreement of this administration to be with, we wanted it to be an African city making a global impact – and Nairobi was the first choice.

We are proud to welcome that great city as our sister city, and I wish to thank Governor Sakaja Johnson for his generous hosting and friendship.

There is a city refusing to be cowed by the failure, conflict and despotism in the region around it.

It is showing the living proof that people can deal with extremely difficult living circumstances if they know there is steady progress forwards, halting as it may be, but progress sure and steady. That is exactly our mission here.

Just as Nairobi is a city of hope in East Africa, so we are a city of hope in South Africa.

When we asked the people of Cape Town to vote for us in 2021, we listened to them. We heard their problems, we heard what made them feel anxious about their future, and then we came up with solutions that we promised to implement if elected into office.

We promised to deliver on seven pledges that each dealt with a specific area of state failure that were and are making people feel hopeless:

In short, these pledges were to:

End load-shedding over time;
Make Cape Town Safer;
Clean up our city, with a focus on litter and on the health of our rivers and vleis;
Make Cape Town the easiest place to do business in Africa;
Accelerate land release for affordable housing
To deliver better basic services by investing a lot more in infrastructure
To expand public transport and fight for control of the trains

When we were elected into office, we made sure that these pledges became priority programmes of this government and we put budget behind them.

We did this because it is important to honour the commitment we made to the citizens of this city; and, if we don't make good on our promises, we know they will remove us from office and give somebody else a chance.

This is good, it is how democracy is supposed to work.

Today we mark just over one year since those Mayoral Priority Programmes began, each with its own clear targets, budgets, line of responsibility, and dashboards.

As we work to achieve these goals, we always remember our reason for being here – our sense of clear higher purpose – which is that when we succeed in these things, then our city-wide economy will grow faster and will lift people out of poverty and into work over time.

In that way we will expand the frontiers of human freedom in our city, because we know that grinding poverty and real freedom are incompatible.

So if that is our higher purpose, then there are few better days in government than when we see real evidence that it's working.

We had such confirmation last week, when StatsSA's Qurterly Labour Force stats let us know that 40 000 more Capetonians found work in the last 3 months, many no doubt for the very first time.

This means we have now had four consecutive quarters of more people getting into work in Cape Town. Four consecutive quarters of jobs growth.

Since this time last year, there are 279 000 more people in work in Cape Town.

That is 279 000 people who had either lost their jobs during Covid or had never had a job at all, who have one now.

And as encouraging as that number is, it is even better to hear that we have now fully recovered and exceeded our jobs numbers since Covid-19.

There are now officially more people employed in Cape Town today than there have ever been before.

While Cape Town maintains SA's lowest unemployment rate, at 23,4%, there are still far, far too many people without jobs.

That is why we are making the right investments now, with a R43bn investment over the next three years in vital basic services infrastructure to drive economic growth and job creation – more than Joburg and Durban combined. This investment alone will create an estimated 135 000 jobs in our city over three years.

And help deliver more dignified basic services in the poorest communities of our city.

When we quadruple our sewer pipe replacement programme from 25km a year to 100km a year, we grow jobs in that segment of the construction and engineering industry, and we improve basic services especially in townships and in poorer communities.

As much as we celebrate each quarter of jobs growth, we must immediately look to the future. The question is what will turn 4 straight quarters of jobs growth in Cape Town into 40 quarters of jobs growth in Cape Town?

The answer lies in being diligent and disciplined in the pursuit of our pledges, and determined in our efforts to protect our city from the failure around us.

It is a simple formula that I will repeat often – if we protect our city from state failure, if we invest properly for the city's future, if we stick to sound money and clean government, then investment and jobs will come and our city will flourish.

Ease of Doing Business

Speaker, that is why we recently launched our very own Ease of Doing Business Index, a first for South Africa.

Through this index, and the city-wide business survey that underpins it, we will hold ourselves publicly accountable for our ambition to be the easiest city to do business in Africa.

Many governments talk about reducing red tape. But we are actually doing something publicly trackable and accountable about reducing red tape in our government.

Our Index goes beyond the defunct World Bank Index, and now rates our performance on ten critical indicators, which the City will track to improve the time, costs, and red tape associated with all our business-facing services, including building plan approvals, service installations, and business licensing.

Already we are seeing progress, for example:

Slashing the average number of days to get an informal trading permit from 43 to 26, with an online permitting system and a R256m injection into trading bay upgrades and services over the next three years
Upgrades to the City's digital 'C3' system for reporting service delivery issues, including a new status update function for outstanding requests

This also builds on the internal culture change we are driving, through initiatives like the 'stupid rule button' which all staff now have access to, and which has already resulted in dozens of innovations of efficiency gains.

Power

Speaker, as one commentator noted wryly, we can be the easiest place to do business in the world, but unless there is electricity, it won't make much difference.

After setting a new benchmark with our Ease of Doing Business Index, we will soon make history again when our Power Heroes campaign starts up in the spring.

The Power Heroes campaign will offer incentives for residents to sign up for remote demand management during peak times, such as power-hungry geysers and pool pumps.

This will put the power to end load-shedding in every home.

In fact, should just 25 000 of Cape Town's more than 600 000 electricity customers sign-up as Power Heroes, we can protect against an additional one full stage of load-shedding during peak hours.

For every 20 000 customers we add to the programme, we will be able to expand the hours of the day that we can protect against loadshedding.

The programme is entirely voluntary, and costs nothing for those who sign up, so we are calling on as many families as possible to sign up to be Power Heroes.

Affordable Housing Land Release

Speaker, we also said that this growing, thriving city must be able to provide more affordable housing.

On Council's agenda for approval today are guidelines for the discounting of public land to help maximise the number of affordable housing units we can get on the land we release.

In the past, many of our land release efforts have been stalled by a lack of clear, institutionalised guidelines for how we discount our land for social and affordable housing.

With these path-breaking guidelines, we are enabling accelerated city land release for more affordable housing, in line with our pledge.

Put simply, the City discounts land we release to enable social housing institutions and private developers to run viable projects. Projects generally need to be mixed-use to be viable, with some retail space and market residential units cross-subsidising the social housing units on the site. We saw this exact model being successfully employed in Nairobi again this week.

These guidelines will provide market clarity on what factors the City will consider in discounting the land we release.

These factors make it clear that the purpose of us releasing land for affordable housing is not to maximise our gain from the land sale. The purpose is squarely and explicitly to maximise the number of affordable units delivered.

This will guide our any decision on land release and, importantly, it does so legally and constitutionally.

The future of affordable housing is all about private sector delivery, with the state playing an enabling role through subsidies, bulk services, and discounted land for viable affordable housing development.

And today, we are doing precisely that.

I am pleased to announce today that we are seeking Council's approval for the release of New Market Street for social housing development.

This 10 300 square metre property is well-located on the verge of Cape Town's CBD in Woodstock, close to all the amenities one could possibly hope for.

While the original feasibility study foresaw 165 social units in a mixed-use development, our more recent analysis is enabling us to maximise the social housing yield to 200 units. This will be cross-subsidised by retail space, and over 300 gap and market rental units. We have also rezoned the property to shorten development timeframes post the release.

We pledged faster land release for more affordable housing, and in the year this priority project has been running, we have delivered five inner city land parcels, totalling over 1 300 social housing units, through this Council. They are:

Newmarket Street (Cape Town) – 200 social housing units
Salt River Market (Salt River) – 215
Pickwick (Salt River) - 600
Fruit & Veg (CBD) – 180
Earl Street (Woodstock) – 160

And this month, tenants started to move in to our well-located 204-unit Maitland Mews social housing development.

It was a pleasure to have the National Minister of Human Settlements, most of the nine provincial housing MECs, and several of the MayCo members from other Metros there to see the project and welcome the first tenants.

Sometimes one assumes that what we are doing here in Cape Town is the norm, and one only finds out by chance that it is in fact not being done elsewhere.

For example, when we were welcoming residents to their Maitland Mews apartments, it came out in our discussions with our national colleagues that only we in Cape Town are offering rates discounts for social housing projects in perpetuity, to help keep rents down forever.

Only Cape Town is offering free water to those social housing units. And now today we will also have clear and transparent guidelines for how we discount the land for those social housing projects.

Cape Town may have had a slow start on social housing, but now we are laying the groundwork for much faster progress.

And we look forward to welcoming many more residents to affordable social housing units in future as our land release programme builds momentum.

On the topic of our discussions with our national counterparts, I'd also like to use this opportunity to set out the facts around our receipt of extra funds from the national department of human settlements, and some of the misinformation that has been spread about our use of these funds.

On the 30March this year – the second last day of the national government's financial year – the City received an unexpected deposit of R111 million in our account. The EFT we all dream of receiving.

I had had a general discussion with the Minister in which she had said she would try to find us more money. There had been no commitments, or discussions around amounts or timing.

When we enquired what the money had been sent to us for, we received a letter 5 days later, on 4 April, informing us that the money was to be used for basic services for 16 new informal settlements that had been established during Covid, and for servicing the relocated residents from the PRASA Central Line relocation programme.

I replied to this letter to express our appreciation for the extra allocation, and to convey our concern that the money required an official rollover permission to allow us to spend it lawfully.

This reply has been twisted, including by the Minister and by some here, to suggest we rejected the allocation.

We did no such thing, as a basic reading of the reply will show. To put that to rest, I'd like to table the reply now for distribution to party whips.

We are still absolutely committed to spending this additional, unexpected allocation, and we are grateful for it.

But we must and will spend it lawfully, and that does require that it should come along with a Treasury rollover guarantee.

While we have already rolled out basic services to 10 of those 16 informal settlements, with the rest on the budget for rollout from July, we would be happy to use this money to install additional services or to ringfence it for once PRASA's relocation programme is complete.

But such a large sum received without notice, and without time to plan projects, cannot reasonably be spent by the end of our financial year end in June. Indeed, since PRASA has not yet even secured land on which to relocate the Central Line illegal occupants, we could not feasibly spend it on those residents.

So it is not an "excuse" to say that we will spend lawfully.

To regard that as an "excuse", gives you some clue as to why local government finances in our country are in the mess they are in.

Just how much of a mess they're in was emphasized again yesterday by RatingsAfrika, when they released their annual municipal financial sustainability index. The MFSI is misleadingly named, because one of its major measures is actually the ability of a municipality to deliver to basic services – confirming what we have often said in Cape Town – well run municipalities can do more for the poor and deliver better basic services.

Cape Town once again came out in the words of RatingsAfrika "head and shoulders above other metros". The leading municipalities in the country in this year's index were Saldanha, Midvaal, George, and Cape Town.

What do they all have in common?

This is not just a coincidence.

They are all run by the party that will never accept failure for South Africa.

To loop back to Fikile Mbalula's car crash interview on BBC's Hard Talk in which he admits South Africa could become a failed state but takes no responsibility for it, nor offers any solutions for it.

That is the difference between these winning municipalities - they are winning because they are all run by the party that does not accept failure and which will do something about it.

And so to Mr Mbalula and to all who accept his admission of defeat I say to you, to amend the words of the Iron Lady herself – You fail if you want to. Cape Town is not for failing.

Thank you.

Published by:
City of Cape Town, Media Office