Municipalities that deposited R1.6bn with failed VBS Mutual Bank stand to lose most of their money, worsening their already dire financial position and increasing the risk for violent protests. Fourteen municipalities stood to lose about R1.4bn of their deposits, and even if they recovered something, they would only do so in about five to seven years, said Co-operative Governance and Traditional Affairs Minister Zweli Mkhize. This has left a huge hole in their budgets, which will negatively affect service delivery to distressed poor communities. Mkhize was concerned that service delivery protests could erupt due to budget shortfalls. But, in an interview with Bloomberg, he insisted that the government would not provide bail-outs to the municipalities involved. The minister urged the provincial departments of co-operative governance and traditional affairs, as well as the municipalities, to work on recovery plans to avert service delivery protests. He gave all the municipalities unti...

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