This article examines the implications of National Treasury’s intervention in a proposed write-off of R23 billion in unauthorised expenditure in Nelson Mandela Bay.
Background on the UIFWE Write-Off Proposal
The proposed write-off of R23 billion in unauthorised, irregular, fruitless and wasteful expenditure (UIFWE) by the Nelson Mandela Bay municipality has sparked controversy. The Municipal Public Accounts Committee (MPAC), chaired by Luxolo Namette, initially supported a blanket write-off without a detailed investigation into individual items. This decision was met with criticism from opposition parties, particularly the African Christian Democratic Party (ACDP) and the Democratic Alliance (DA), who argued that the proposal bypassed necessary due diligence and accountability measures. The ACDP’s Lance Grootboom highlighted concerns that the coalition government was attempting to shield negligent officials from liability.
National Treasury’s Intervention
On 19 August, National Treasury’s deputy director-general for intergovernmental relations, Ogalaletseng Gaarekwe, intervened, declaring the write-off proposal unlawful as it contravened Section 32 of the Municipal Finance Management Act (MFMA). The Treasury’s intervention followed complaints from the ACDP and DA, who warned that the MPAC’s recommendation lacked the required item-by-item assessment. Gaarekwe emphasised that any write-off must be preceded by a thorough investigation to establish liability and recovery potential. This intervention forced the city to postpone its council meeting, which was set to discuss the write-off among other agenda items.
Responses from Municipal Officials and Opposition
In the wake of the Treasury’s ruling, MPAC chair Namette and Mayor Babalwa Lobishe issued statements asserting their commitment to accountability. They claimed that the MPAC was intensifying its work to assess individual UIFWE items rather than proceeding with a blanket write-off. However, opposition leaders like Grootboom accused them of attempting to mislead the public by portraying themselves as champions of accountability after being compelled to retreat by the Treasury. Lobishe acknowledged the city’s responsibility to address the UIFWE issue transparently but insisted that accountability must follow due process, stating that not every recorded UIFWE amount equates to misappropriation of funds.
Implications for Public Procurement
This incident highlights the critical role of oversight in public procurement and the importance of adhering to legal frameworks. The intervention by National Treasury serves as a reminder that fiscal responsibility and accountability are paramount in managing public funds. The requirement for item-by-item assessments ensures that any financial decisions are backed by evidence and due process, which is essential for maintaining public trust. As the municipality navigates this complex situation, the emphasis on accountability and thorough investigation will be crucial in addressing the concerns raised by opposition parties and the public regarding the management of public resources.
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The unfolding situation in Nelson Mandela Bay underscores the necessity for transparency and accountability in public procurement processes, particularly when substantial sums of taxpayer money are at stake.
Reported from dailymaverick.co.za, 2026-08-26. The Tender Wire is published by Otnox.
