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IOL News
29-05-2025
- Business
- IOL News
Critics slam Cape Town's ‘record-breaking' R36. 8bn budget for deepening inequality
The City of Cape Town unveils its amended 2025/26 budget, promising relief for households while maintaining record infrastructure investments aimed at building a safer, more inclusive, and future-ready city. Image: Unsplash Cape Town's R36.8 billion 2024/25 capital budget has been hailed by the City as a record-breaking investment in infrastructure and future-readiness. But critics argue that beneath the impressive graphics and modern catchphrases lies a deeply unequal plan that entrenches apartheid-era spatial and economic divides. Faiez Jacobs, former MP and local governance and inclusive development advisor, argues that Cape Town's budget is not failing; it is succeeding selectively, serving the affluent while sidelining the poor. Jacobs described the city's strategy as a 'green gentrification' project cloaked in smart city and sustainability language. 'Budgets reveal priorities,' he said, and this one 'reveals a city that is still hostile to the poor, performative to the public, and generous to the privileged.' His sector-by-sector analysis highlights what he calls systemic exclusion: inner-city social housing projects remain unfunded, township electrification is under-resourced, sanitation in informal settlements is largely ignored, and most major transport and ICT upgrades are concentrated in wealthy, already-connected areas. Councillor Siseko Mbandezi, the City's Mayoral Committee Member for Finance, disputes these claims. He said that a full 75% of Cape Town's infrastructure investment directly benefits lower-income households, and calls Jacobs' article 'woefully inaccurate and misleading.' According to Mbandezi, Cape Town's pro-poor portion of the four-year R40 billion budget surpasses the total capital budgets of other South African cities. In response to growing public criticism and pushback, the City amended its 2025/26 capital budget on Wednesday, May 28, introducing what it calls targeted relief without compromising the long-term infrastructure agenda. Mayor Geordin Hill-Lewis described the updated budget as the 'Invested in Hope' budget, reaffirming the City's commitment to long-term infrastructure investment while addressing affordability concerns. The City claims it has listened to Capetonians during the public participation phase and made adjustments that will significantly reduce household bills compared to the March draft. Among the most notable changes are the extension of the rates-free threshold from the first R450,000 of property value to homes valued up to R7 million, an increase in the monthly income threshold for pensioner rebates from R22,000 to R27,000, and reduced fixed water charges for homes valued between R1 million and R25 million. The City has also reduced its new City-Wide Cleaning charge for residential properties below R20 million and introduced a full rebate on this charge for pensioners. At the same time, the per-unit electricity price will decrease starting in July, as the City removes a 10% cost previously embedded in electricity tariffs to fund cleaning services. The result, the City claims, is that monthly bills will be meaningfully lower for the majority of ratepayers than initially proposed. A home valued at R1.2 million could see bills reduced by up to 15%, while a R5 to R7 million property might experience reductions of up to 40%. According to Hill-Lewis, these changes mean that 97% of ratepayers will not see increases exceeding 20%, and very few will experience anything close to the 30% or 40% spikes cited in some recent reports. The mayor framed the changes as not just financially pragmatic, but morally necessary, saying, 'If anyone here is interested only in kicking the can down the road, the exits are clearly marked.' On the controversial absence of major inner-city social housing projects over R50 million, Mbandezi reiterated that these are not typically funded through the City's main capital plan. Instead, they rely on a combination of subsidies from the Social Housing Regulatory Authority, private developer investments, and new incentive schemes. He highlighted that the City has released more land for affordable housing in the past two years than in the entire previous decade and has introduced by-law reforms to support micro-developers. Yet critics remain unconvinced. Brent Herron, secretary general of the GOOD Party, argued that only two of the city's sixteen major energy projects directly affect Cape Flats communities, and even those are merely replacing aging transformers in Mitchell's Plain and Gugulethu. He accused the City of failing to address spatial inequality in any meaningful way and points to the long-delayed MyCiTi Phase 2 rollout as further evidence. Originally promised in 2016, the network's expansion has been so slow that, in Herron's words, 'the MyCiTi network will not be completed in our lifetimes.' Fadiel Adams, a former MP and member of the National Coloured Congress, said: 'It's not a tale of two cities. It's a tale of two shades of cities.'' Adams claims that residents in working-class areas like Grassy Park pay higher rates than affluent constantia, despite receiving worse services. He also criticised what he calls 'poor planning' in roadworks and upgrades that are hurting small businesses by increasing congestion during peak hours. In his view, high-end suburbs continue to be 'heavily subsidised by the state and the poor.' Jacobs draws sharp comparisons between infrastructure allocations, asking, 'Why do Camps Bay's sewers get R427 million, but Gugulethu's sewer backlog only R154 million?' Mbandezi has directly challenged this, stating that the R4.25 billion has been earmarked for pro-poor water and sanitation projects, with major upgrades recently completed in low-income areas like Gugulethu and Masiphumelele. GOOD Party councilor, Anton Louw, recognised that the amendments offer some meaningful relief. He welcomed the expanded pensioner rebates and the restructured property tax thresholds, but noted that these measures are only a partial fix. 'This is a textbook case of people power in action,' Louw said. He praised the role of public participation. However, he cautioned that 'modest relief for some ratepayers' still does not resolve what he describes as the City's habit of shifting funds between tariff structures while extracting large surpluses from electricity and levies. 'Cape Town can be both world-class and inclusive. 'But it must place the poor and working majority at the centre of capital planning,not on the outskirts, or at the bottom of funding tables,'' said Jacobs. The City's amended 2025/26 budget is now open for a new round of public participation until June 13. [email protected] Get your news on the go, click here to join the IOL News WhatsApp channel. IOL Politics
IOL News
27-05-2025
- Business
- IOL News
A City Split in Two: How Cape Town's 2024/5 Budget Betrays Its Poor
Faiez Jacobs explores how Cape Town's 2024/5 budget, while marketed as a record investment, perpetuates spatial and economic apartheid, leaving the city's poorest communities behind. Image: Tracey Adams / IOL This article draws directly from the official City of Cape Town budget document: Annexure 21 – Projects Over R50 Million: 2024/25. A full sector-by-sector analysis covering Housing, Water and Sanitation, Energy, Transport, and Digital Infrastructure including all Top 20 projects in each category. Cape Town's 2024/25 budget is being marketed as a record investment in infrastructure, growth, and future-readiness. Glossy graphics showcase R36.8 billion in capital projects from smart city operations and solar grids to road upgrades and wastewater treatment plants. The DA-led City Council proclaims progress. But beneath this polished façade lies a deeper, more uncomfortable truth: this budget reinforces the city's spatial and economic apartheid, entrenching exclusion while branding it as modernisation. The Myth of Equal Development Across five sectors Housing, Water and Sanitation, Energy, Transport, and Digital Infrastructure a clear pattern emerges. While poor and working-class communities receive rhetorical inclusion and a few tactical investments, the lion's share of funding is absorbed by already well-serviced, wealthier areas. We are not witnessing pro-poor development. We are watching the deepening of a Tale of Two Cities. 1. Human Settlements: Perpetuating Spatial Apartheid Of the Top 20 Housing Projects, valued at R2.55 billion, the city directs funding mostly toward peripheral townships: Blue Downs, Gugulethu, Mfuleni, and Atlantis. On the surface, this seems just. But scratch deeper and a disturbing omission appears: there is no major inner-city social housing project funded over R50 million. Not in Salt River. Not in Woodstock. Not in the Foreshore. This is despite: Court orders compelling the city to act, available well-located public land and a backlog of over 400,000 families on the waiting list. Projects like the Airport Industria housing development remain in limbo, delayed by bureaucratic inertia and political resistance. In contrast, R247 million is earmarked to build mixed-use housing further away from the CBD entrenching commuting costs, congestion, and carbon footprints. Apartheid's logic lives on, not by law, but by land use and budget choices. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ 2. Water and Sanitation: Cape Flats Neglected While Camps Bay Thrives Cape Town faces a sanitation crisis. Raw sewage runs through informal settlements. Toilets overflow in Gugulethu. Khayelitsha's ageing pipelines collapse under strain. Yet the city's R9.25 billion water and sanitation budget prioritises mega-projects that bypass the poorest. Yes, the Cape Flats Wastewater Works upgrade (R1.35 billion) is commendable. So is the Zandvliet expansion. But consider this: the Camps Bay Pump Station serving one of the wealthiest suburbs receives R427 million, nearly three times more than the entire sanitation budget for Masiphumelele. No funding is allocated for dry sanitation pilots, community-managed ablution blocks, or decentralised waste treatment in informal settlements. No urgency exists to address Philippi's groundwater contamination or the sanitation gap in "Covid" informal settlements. The rhetoric says 'inclusive growth.' The numbers say 'privilege protection.' 3. Energy Transition: A Future for the Few The DA administration is proud of its green energy agenda. In this budget, it allocates R8.27 billion to energy and electricity, with projects like: Atlantis Solar PV + Battery Plant (R621 million), Smart Grid Automation (R964 million), Steenbras Hydroelectric Station Rehab (R1.27 billion). Yet township residents, who experience the worst of load-shedding, are left in the dark literally and figuratively. The Informal Settlement Electrification Program, targeting Crossroads and Nyanga, receives just R254 million a meagre 3% of the energy budget. Why no investment in: Microgrids for backyarders? Rooftop PV pilots in Khayelitsha? Solar training for youth in Mitchells Plain? This is not an energy transition. It is a green gentrification strategy dressed in climate language, engineered to benefit commercial zones, CBD towers, and smart offices while the Cape Flats remain energy-insecure. 4. Transport: Roads to Nowhere for the Poor Transport receives the largest capital allocation R11.5 billion. The DA calls it a 'mobility revolution.' Yet 67% of this goes to: Foreshore Freeway redevelopment (R940 million), N1/N7 and N2 Interchanges (R1.96 billion), CBD nodal upgrades (R663 million) and Airport Link reconfiguration (R463 million). Meanwhile, Khayelitsha, Gugulethu, Bonteheuwel, and Nyanga remain traffic-choked, underserved, and dangerous for pedestrians. Yes, there is R588 million for Spine Road and R501 million for Nyanga road rehab but these are a fraction of what is needed. The Bonteheuwel Active Mobility Project, a rare pro-poor investment in walking and cycling, is only R275 million less than a third of the Foreshore flyover upgrade. Where is the funding for: Safe school zones in Bishop Lavis? Accessible taxis for the elderly in Manenberg? Flood-proof roads in Philippi? Public transport reform is sorely needed. Yet the MyCiTi expansion continues to exclude most black working-class commuters, while taxis used by 70% of residents are still criminalised, not subsidised. 5. Digital Infrastructure: WiFi in Theory, Disconnection in Reality The DA touts its 'Smart City vision', with R7.8 billion in ICT and data infrastructure. Projects like the: Smart City Ops Platform (R712 million), ERP Cloud Upgrade (R648 million) and IoT Sensor Network (R314 million), ...are futuristic and seductive. But for whom? Yes, R184 million goes to Cape Flats Smart Poles and R288 million to school WiFi but many township youth still lack devices. Fibre to Langa and Manenberg libraries means little without laptops, stable power, and tech support. An AI chatbot to help pay rates does not help a backyarder whose shack has no electricity. Open Data and Digital Inclusion mean nothing without co-design, digital literacy, and community ownership. The DA's Double Game: Performative Efficiency, Structural Exclusion The DA often says: 'we get the basics right.' But budgeting is not neutral. Every project chose nor not chosen reveals values. Why do Camps Bay's sewers get R427 million, but Gugulethu's sewer backlog R154 million? Why is Foreshore's freeway prioritised over Masiphumelele's flood-proof roads? Why is there no social housing in Sea Point, but R247 million for a distant project in Airport Industria? These are not accidents. They are ideological expressions of a vision: one where the city is clean, digital, solar-powered, and efficient for those who already have. A Progressive Vision Reimagined We are not calling for no development. We are calling for just development. A budget that: Prioritises sanitation where dignity is denied, not where beaches must be clean. Electrifies informal homes before expanding CBD offices. Delivers social housing where jobs are, not where land is cheap. Funds youth tech skills before smart surveillance. Cape Town can be both world-class and inclusive. But it must break with its colonial urban design, apartheid-era zoning, and neoliberal budget logic. It must place the poor and working majority at the centre of capital planning not on the outskirts, or at the bottom of funding tables.
