Reliance on service charges bedevils municipalities
Mismanagement and lack of jobs worsen situation
The dire state of municipal governance in South Africa has been in the news for much of this year. Recent events in Emfuleni local municipality show the extent of the problem.
The municipality, located in the south of Joburg, has been unable to settle water and electricity debts owed to the utilities Rand Water and Eskom. This has led to services to residents being reduced or cut. Lack of infrastructure maintenance has further bedevilled the delivery of water and electricity, as well as rubbish removal.
The municipality’s entire basic vehicle fleet was recently repossessed by creditors. In June, the Gauteng government placed the municipality under financial administration.
Emfuleni is not alone. The national minister responsible for municipalities recently said 31% of the country’s municipalities are “dysfunctional”, and another 31% “almost dysfunctional”.
He went on to say that many municipalities are battling with financial management as well as good governance and administration.
It’s tempting to blame the government for the municipality’s troubles.
According to the National Treasury’s municipal finance data website, Emfuleni had a healthy cash balance in 2015. But it then fell by over a third in 2016, before collapsing in 2017.
While the municipality did have problems with wasteful expenditure and budget overspending before, things got much worse after the local government elections in August 2016.
The municipality has also been experiencing political turmoil. In 2017, mayor Simon Mofokeng resignedamid a sex scandal and rumours of financial mismanagement.
Opposition parties and civil society organisations blame the council and mayor, who are from the governing ANC, for the municipality’s problems.
But it’s also necessary to look beyond people and politics, and consider whether structural factors have contributed to the crisis. Emfuleni’s problems perhaps point to flaws in the way in which local government in SAis structured and financed.
Emfuleni’s cash shortage has partly been blamed on poor collection of revenue from service charges.
This highlights the extent to which South African towns depend on income from service delivery.
A budget that depends on recovering service debt means that the ability to run the municipality depends on how much residents can consume and pay for. This is neither stable nor sustainable.
Emfuleni has gone through tough economic times in recent years. Unemployment has risen sharply and some better-off residents have moved away. This does not bode well for service demand, or the ability to pay for what has been consumed.
But the problem goes beyond money. At least some of the crisis in Emfuleni has been down to mismanagement.
Let the people choose how they want to travel, but taxi men do not believe in this freedom of choice which is spelled out in the wonderful constitution of SA, says the writer.