Daily Dispatch

Ensure local govt works

MAKANA Municipality is in such dire financial straits that three civil society organisations are pushing for it to be placed under administration for a second time in two years.

But Makana is not alone. The vast majority of municipalities in the Eastern Cape, and many nationally, are in the same state. Mismanagement, poor revenue collection, and blatant corruption has plunged dozens of municipalities into serious financial crises and little is being done about it.

In its analysis of local government finances at the end of the 2015-2016 financial year, National Treasury found the financial health of 250 of the country’s total 278 municipalities (92%) to be of such concern that they needed some sort of intervention.

Some 71 or 26% were in a “particularly poor financial position” – 106 annually spent more than they had resulting in a net deficit, 137 took an average of 90 days to collect debt, and 133 took more than 90 days to pay their creditors.

Each of these infractions was contrary to the Municipal Finance Management Act (MFMA). Beyond that the consequences are debilitating for citizens who depend on basic services and businesses that provide services to municipalities. Many smaller businesses cannot survive without prompt payment by creditors.

Treasury attributes the financial shambles to various factors. One of the most prominent is poor management. Far too many municipalities do not have permanent people in top positions. In 2016 some 32% of municipalities had acting managers and 31% acting chief financial officers. Of those who are permanent, few meet minimum competency requirements. In the Eastern Cape’s 45 municipalities, only 15 MMs (33%) complied with minimum competency limits.

The result is poor management and a lack of accountability across-the-board. Conditional and municipal infrastructure grants are poorly utilised and too often, much is returned unspent to provincial or national treasuries despite desperate needs.

Local government is sphere of government closest to the people. In theory, local politicians should be close to the communities they purport to serve and responsive to their problems. Vital basic services are delivered at local level. Poor institutional performance translates into poor service delivery and the knock-on effect on businesses and individuals is devastating.

Apartheid policies bequeathed a legacy of massive poverty and gross inequality in almost every sphere, including municipal services. The preamble to the Municipal Structures Act emphasises the fundamental importance of local government to our democracy, development and nation-building.

If we cannot get things working at local level our entire democratic project remains under threat. It’s time national and provincial governments turn their focus to properly empowering and supporting local government so that they meet their constitutional duty to provide sustainable, effective and efficient municipal services, promote social and economic development, and encourage a safe and healthy environment where all our citizens can lead uplifted and dignified lives. If not democracy will remain meaningless to the majority of our people.