JOHANNESBURG – The Cooperative Governance and Traditional Affairs department has urged affected municipalities who invested funds in VBS Mutual Bank to work on recovery plans.
The 14 municipalities reported that among themselves, a total of R1.5-billion was deposited into VBS Mutual Bank as part of a short-term investment by the municipalities from North West, Limpopo and Gauteng provinces.
On Tuesday, the Minister of Cooperative Governance and Traditional Affairs, Zweli Mkhize, met with the mayors and municipal managers of the 14 municipalities which invested funds in the VBS Mutual Bank.
“The meeting also discussed in detail the nature of these investments,” the Cogta department said.
“Most importantly, the meeting looked at the possible impact that these investments could have on service delivery.
“The minister urged provincial Cogta departments and the affected municipalities to work on recovery plans to augment possible service delivery disruptions due to the budget shortfall as a result of loss of investment. Minister Mkhize also urged municipalities to go out to inform the communities they serve about this challenge and the measures in place to mitigate service delivery challenges.”
Cogta said all municipalities are expected to report to it on the issues around the finances and their impact on service delivery.
Mkhize said his department would await the various processes, including investigations by the South African Reserve Bank, which Cogta supports. It was also committed to continue its monitoring of the situation that was unfolding with regards to the investments made in VBS bank