Lo­cal gov­ern­ment in South Africa is in cri­sis. How it can be fixed

Dirk Brand is Ex­tra­or­di­nary Se­nior Lec­turer at the School of Pub­lic Lead­er­ship, Stel­len­bosch Univer­sity. This ar­ti­cle was first pub­lished in the Con­ver­sa­tion Africa.

African Times - - News -

Most of South Africa’s 257 mu­nic­i­pal­i­ties are in a dis­as­trous fi­nan­cial po­si­tion. Ac­cord­ing to the coun­try’s Au­di­tor Gen­eral, only 33 (13%) are in full com­pli­ance with the rel­e­vant le­gal re­quire­ments, and pro­duced qual­ity fi­nan­cial state­ments and per­for­mance re­ports.

The most re­cent au­dit re­port from Au­di­tor Gen­eral, Kimi Mak­wetu, shows that nearly a third (31%) of the mu­nic­i­pal­i­ties in­di­cated that they are not fi­nan­cially vi­able. In busi­ness terms that means they are not go­ing con­cerns any­more. Ac­cord­ing to Mak­wetu this dire sit­u­a­tion can be as­cribed to a range of fac­tors. These in­clude a lack of ap­pro­pri­ate fi­nan­cial and man­age­ment skills, po­lit­i­cal interference and in­fight­ing in coun­cils. The fail­ure to fill key per­son­nel po­si­tions is also a prob­lem, as is the fact that there’s clearly a lack of po­lit­i­cal will to en­sure ac­count­abil­ity.

There are se­ri­ous con­se­quences to this un­ac­cept­able state of af­fairs. The most im­por­tant is that mu­nic­i­pal­i­ties are un­able to de­liver ser­vices such as clean wa­ter, san­i­ta­tion and elec­tric­ity. It also means there’s a lack of main­te­nance of in­fra­struc­ture in towns and cities all over the coun­try. The rise in protests by disgruntled cit­i­zens is a clear sign of peo­ple’s frus­tra­tion and the fail­ure of lo­cal gov­ern­ment to pro­vide ba­sic ser­vices.

Lo­cal govern­ments are also re­spon­si­ble for pro­vid­ing ser­vices such as refuse and sewage re­moval and dis­posal, storm wa­ter drainage sys­tems as well as mu­nic­i­pal roads and street lighting in a sus­tain­able way. The Con­sti­tu­tion and the laws of the coun­try make it clear that mu­nic­i­pal of­fi­cials and coun­cil­lors are ac­count­able to en­sure good fi­nan­cial gov­er­nance, and that there could be dis­ci­plinary or crim­i­nal pro­ceed­ings if they fail to do so. For their part, cit­i­zens are en­ti­tled to re­ceive good ser­vices from their re­spec­tive mu­nic­i­pal­i­ties.

How can the dis­as­trous sit­u­a­tion be turned around? There ap­pears to be a com­plex set of prob­lems which means that there are no quick fixes. What’s re­quired is a com­pre­hen­sive ap­proach that deals with var­i­ous el­e­ments of the lo­cal gov­ern­ment sys­tem.

What needs to be done Firstly, it’s im­por­tant to un­der­stand the role that the other spheres of gov­ern­ment have to play to help cure the prob­lems. Al­though mu­nic­i­pal­i­ties have a spe­cific con­sti­tu­tional role to play, they are not ex­pected to do so on their own. Pro­vin­cial and na­tional govern­ments must sup­port mu­nic­i­pal­i­ties to per­form their func­tions. They can do this in var­i­ous ways, such as pro­vid­ing train­ing, technical sup­port and ca­pac­ity build­ing work­shops. Fi­nan­cial gov­er­nance ca­pac­ity in key is­sues such as debt col­lec­tion, risk man­age­ment, in­ter­nal au­dit and rev­enue man­age­ment needs to be strength­ened.

The pro­vin­cial and na­tional govern­ments must also mon­i­tor the per­for­mance, in­clud­ing the fi­nan­cial per­for­mance of mu­nic­i­pal­i­ties. If they all do this prop­erly, more fi­nan­cial man­age­ment prob­lems could be iden­ti­fied and dealt with dur­ing the course of a fi­nan­cial year.

The Au­di­tor Gen­eral is also an im­por­tant part of the sup­port struc­ture. His of­fice is an im­por­tant con­sti­tu­tional in­sti­tu­tion that does more than just au­dit the ac­counts of all three spheres of gov­ern­ment. It also has an im­por­tant role to play in the ac­count­abil­ity chain by iden­ti­fy­ing key prob­lems and causes. It goes on to make rec­om­men­da­tions to help mu­nic­i­pal­i­ties solve their prob­lems. At the mo­ment the Au­di­tor Gen­eral’s of­fice doesn’t have the power to en­force its rec­om­men­da­tions. But that’s about to change. Amend­ments to the Pub­lic Au­dit Act, 2004, be­ing de­bated in Par­lia­ment will give the of­fice more teeth to strengthen ac­count­abil­ity. This is a wel­come and nec­es­sary leg­isla­tive im­prove­ment.

But a great deal of what needs to be done rests with mu­nic­i­pal­i­ties them­selves. Lo­cal gov­ern­ment fi­nance spe­cial­ist Deon Van der Westhuizen, states that one of the cor­ner­stones of suc­cess­ful, con­tin­ued ser­vice de­liv­ery is sys­temic dis­ci­pline. This im­plies ef­fec­tive rev­enue man­age­ment, which in­cludes timely debt col­lec­tion, reg­u­lar pay­ment of sup­pli­ers and a well­struc­tured and man­aged re­pairs and main­te­nance plan for the in­fra­struc­ture of a mu­nic­i­pal­ity. But to do this ef­fec­tively and ef­fi­ciently, ap­pro­pri­ate fi­nan­cial man­age­ment ca­pac­ity is re­quired. Where mu­nic­i­pal­i­ties lack this, creative use of shared ser­vices be­tween mu­nic­i­pal­i­ties could be used. And pri­vate sec­tor ex­per­tise to help im­prove fi­nan­cial man­age­ment and au­dit out­comes should also be part of the so­lu­tion. In a worse case sce­nario, a mu­nic­i­pal­ity can be put un­der ad­min­is­tra­tion. This means that for a lim­ited pe­riod of time the par­tic­u­lar pro­vin­cial gov­ern­ment takes over the run­ning of the mu­nic­i­pal­ity in or­der to solve the crit­i­cal prob­lems that prevent it from func­tion­ing prop­erly. It’s a very dras­tic mea­sure and should only be used spar­ingly since it in­ter­feres in the con­sti­tu­tional man­date of an elected mu­nic­i­pal coun­cil. But in cases of se­ri­ous sys­temic fail­ure it might be the most ap­pro­pri­ate course of ac­tion. It should, how­ever, be only for a lim­ited time and should be aimed at get­ting the mu­nic­i­pal ad­min­is­tra­tion in a po­si­tion where it could func­tion on its own again. Lastly, South Africans across the board need to work harder at en­sur­ing that of­fi­cials are held ac­count­able. Ac­count­abil­ity is one of the fun­da­men­tal prin­ci­ples of the coun­try’s con­sti­tu­tional democ­racy. Any per­son or gov­ern­ment in­sti­tu­tion that does not give ef­fect to ac­count­abil­ity con­tra­venes the Con­sti­tu­tion. Good qual­ity fi­nan­cial state­ments and an­nual re­ports are nec­es­sary to en­sure that ac­count­abil­ity and trans­parency are achieved.

The cur­rent sit­u­a­tion is a na­tional cri­sis and re­quires a joint ef­fort across po­lit­i­cal, geo­graph­i­cal and ju­ris­dic­tional bound­aries to get mu­nic­i­pal­i­ties work­ing prop­erly.

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