Nene wants 15 EC municipalities ‘back on track’

‘It’s actually poor planning, poor budgeting’

FINANCE Minister Nhlanhla Nene wants the Eastern Cape government to take over 15 municipalities that are in distress.

These include Makana in Grahamstown, Ngqushwa in Peddie, Enoch Mgijima in Komani, Emalahleni in Dordrecht, Intsika Yethu in Cala, Great Kei in Kei Mouth, Dr Beyers Naude in Graaff-Reinet, Sakhisizwe in Khowa (Elliot), and Walter Sisulu municipality in Aliwal North.

The other municipalities are Ndlambe, Komga, Inxuba Yethemba in Cradock, Kouga as well as the Chris Hani and Amathole district municipalities.

Nene said when matching “cash and cash equivalents” against “total creditors” for the period, “it showed that municipalities with unfunded budgets are unable to pay their creditors within the prescribed 30 days”.

Some 40% of the country’s municipalities – 112 of them – have been identified as being in a service delivery crisis as they did not budget for programmes they identified as priorities in their development planning (IDP) for the current financial year, which ends next month. These details are contained in Nene’s written response to parliamentary questions by DA cooperative governance and traditional affairs (Cogta) shadow minister Kevin Mileham.

Mileham said this meant the municipalities had insufficient resources to meet the service delivery needs of residents, as their income did not meet their forecast expenditure. “It may also indicate that municipalities are not budgeting effectively, or are not adopting austerity measures to ensure that basic services are prioritised.”

Asked what the government was doing about the crisis, Nene said making financial recovery plans was “the primary responsibility of a municipality facing financial challenges as legislated in Chapter 13 of the MFMA [Municipal Finance Management Act], and this provides for the municipality to request support for development of a financial recovery plan from provinces and National Treasury”.

“Where such requests are received from municipalities the financial recovery plan is developed by the National Treasury in consultation with the relevant provincial treasury and the municipality,” added Nene.

The report reveals that only 14 of the 112 municipalities have managed to craft such recovery plans and have sourced funding from the National Treasury. In the Eastern Cape, only Makana took responsibility as outlined in the MFMA.

Addressing the media yesterday Nene said: “It is not that they [the municipalities] do not have the money. It’s because they plan to do things they don’t have to do. So it’s actually poor planning, poor budgeting.”

He added: “We are working with Cogta, among the interventions. We are beefing up to see if those municipalities in distress cannot be put back on track.”

The DA wants the minister to move with speed and intervene, with Mileham saying: “The DA cannot allow our local governments, which have a clear mandate of service delivery, to fail. What is even more shocking is that only 14 have approved financial recovery plans.”

In Great Kei, employees downed tools for a second day yesterday saying they wanted the municipality placed under administration.

Samwu branch chairman Luthando Juju said their grievances dated back to 2016, when the municipality paid rental allowances to some of its 147 employees and not others.

Juju said the municipality had also employed unqualified directors.

“The municipality is not financially viable as our medical aid and pension contributions are not paid,” he said, adding the municipality had taken out a R6-million overdraft last year to pay bonuses.

ANC provincial secretary Lulama Ngcukayitobi said: “Their demands are legitimate,” and added that the party would visit the area before the end of the week with Cogta MEC Fikile Xasa. Mayor Loyiso Tshetsha could not be reached at the time of writing.