Financial Mail - - FEATURE - Luy­olo Mken­tane mken­tanel@busi­ Nomkhita Mona

As Nel­son Man­dela Bay fights the Covid-19 pan­demic, the Na­tional Trea­sury has threat­ened to cut its share of na­tional rev­enue due to gover­nance mis­steps

As Eastern Cape pre­mier Os­car Mabuyane has sent an SOS to na­tional gov­ern­ment for help man­ag­ing the Covid-19 pan­demic, con­cerns are ris­ing about the ef­fects on­go­ing po­lit­i­cal and gover­nance ruc­tions at Nel­son Man­dela Bay (NMB) may have on the metro’s frail health-care sys­tem.

The Eastern Cape metro needs all hands on deck to re­spond to the out­break, which has al­ready claimed the prov­ince’s only two met­ros — NMB and Buf­falo City — as hotspots. The city ad­mits it is “un­der siege”; by Mon­day, 9,400 of the Eastern Cape’s 35,000 in­fec­tions had been recorded in NMB.

But the po­lit­i­cal shenani­gans that are play­ing out in the metro raise doubts about the coun­cil’s abil­ity to re­spond to the coro­n­avirus ef­fec­tively.

Lead­er­ship of the metro has been a mess for years. In Au­gust 2018 UDM coun­cil­lor Mongameli Bobani was elected ex­ec­u­tive mayor af­ter the DA’S Athol Trol­lip was ousted in a vote of no con­fi­dence. Lit­tle over a year later, in De­cem­ber 2019, Bobani met the same fate. His deputy, African In­de­pen­dent Congress coun­cil­lor Th­sonono Buy­eye, has been act­ing in the po­si­tion ever since.

The busi­ness sec­tor has been par­tic­u­larly crit­i­cal of high-level va­can­cies in the metro. In a June 15 let­ter to Pres­i­dent Cyril Ramaphosa, the NMB Busi­ness Cham­ber (NMBBC) laments the “pro­longed dys­func­tional state” of the mu­nic­i­pal­ity and that the po­si­tion of ex­ec­u­tive mayor has been va­cant for more than six months.

It echoes a let­ter the cham­ber sent Bobani back in Septem­ber 2018, de­cry­ing the “cur­rent dys­func­tional state” of the mu­nic­i­pal­ity and the dire state of its econ­omy, and high­light­ing the need to fill the crit­i­cal va­can­cies of city man­ager and CFO.

Cham­ber CEO Nomkhita Mona tells the FM that over the years the sit­u­a­tion at NMB has been steadily de­te­ri­o­rat­ing, and that this prompted the cham­ber to es­ca­late mat­ters.

“What level of dys­func­tion would ne­ces­si­tate a mu­nic­i­pal­ity to have no less than 11 act­ing city man­agers in 18 months?” Mona asks. “The chaos that en­sues is unimag­in­able.”

In its most re­cent let­ter, the cham­ber notes that the Na­tional Trea­sury has threat­ened to with­hold the eq­ui­table share due to the metro from the na­tional cof­fers un­der sec­tion 216 (2) of the constituti­on.

This, the cham­ber said, would have “dire and far-reach­ing” so­cioe­co­nomic con­se­quences for res­i­dents — par­tic­u­larly with the metro al­ready on the brink of disas­ter, fac­ing “rapidly ris­ing Covid-19 in­fec­tions and the as­so­ci­ated eco­nomic re­ces­sion, an ero­sion of busi­ness con­fi­dence, as well as the on­go­ing de­te­ri­o­ra­tion in the man­age­ment of crit­i­cal in­fra­struc­ture, wa­ter short­ages caused by leaks and the cur­rent drought sit­u­a­tion (with ‘Day Zero’ an ever-loom­ing threat)”.

As Mona tells the FM: “The city is on the edge of a cliff, about to fall into an abyss ... When­ever a mu­nic­i­pal­ity is un­able to ful­fil its ex­ec­u­tive obli­ga­tions in terms of the constituti­on or any other leg­is­la­tion, eco­nomic growth is sti­fled and a con­straint is placed on busi­ness com­pet­i­tive­ness.”

On June 29, the coun­cil’s fears were re­alised when Trea­sury deputy direc­tor­gen­eral for in­ter­gov­ern­men­tal re­la­tions Mal­i­jeng Ngqaleni in­formed act­ing city man­ager Mvu­leni Mapu of the Trea­sury’s in­ten­tion to with­hold the re­main­ing lo­cal gov­ern­ment eq­ui­table share and con­di­tional grants.

The eq­ui­table share alone, says DA Eastern Cape leader Nqaba Bhanga, is about R700m.

In her let­ter, Ngqaleni says the Trea­sury is look­ing to in­ter­vene af­ter the coun­cil failed to table and adopt the 2020/2021 medi­umterm rev­enue and ex­pen­di­ture frame­work (the draft bud­get) and the draft in­te­grated

Eastern Cape Pre­mier Os­car Mabuyane de­vel­op­ment plan (IDP) in line with the Lo­cal Gov­ern­ment: Mu­nic­i­pal Fi­nance Man­age­ment Act and the Lo­cal Gov­ern­ment: Mu­nic­i­pal Sys­tems Act.

Fail­ure to com­ply with bud­get pro­cesses is not only a “se­ri­ous and per­sis­tent breach of pre­scribed mea­sures”, she says, but “a re­flec­tion of weak and poor gover­nance on the part of the mu­nic­i­pal­ity”.

Ngqaleni’s let­ter fur­ther points to “po­lit­i­cal and ad­min­is­tra­tive in­sta­bil­ity” lead­ing to “ma­te­rial gover­nance fail­ures”. By way of ex­am­ple, she refers to a June 5 coun­cil meet­ing to con­sider the bud­get that was canned for want of the re­quired quo­rum.

And while the law pro­vides for the deputy ex­ec­u­tive mayor to act in the po­si­tion of ex­ec­u­tive mayor, “this was never in­tended to be per­pet­ual” and, if chal­lenged, “a com­pe­tent court may in­ter­pret this as ir­reg­u­lar”.

Ngqaleni takes aim at act­ing city man­ager Mapu him­self, not­ing that, in the ab­sence of a coun­cil res­o­lu­tion, the Trea­sury con­sid­ers his ap­point­ment “ir­reg­u­lar and there­fore un­law­ful ... [with] far-reach­ing and po­ten­tially dev­as­tat­ing con­se­quences with re­gard to a

myr­iad ad­min­is­tra­tive and fi­nan­cial de­ci­sions”.

But May­oral coun­cil mem­ber Andile Lungisa tells the FM that Ngqaleni’s let­ter was pre­ma­ture: on the very day she sent it, the coun­cil had sat to ap­prove the IDP and bud­get.

“Even if we didn’t ap­prove the IDP and bud­get, in­vok­ing sec­tion 216 (2) of the constituti­on is puni­tive, dras­tic and un­jus­ti­fied,” says Lungisa. “This is a witch hunt that we are deal­ing with. The Na­tional

Trea­sury is be­ing mis­chievous, un­rea­son­able and un­just.

We won’t be told what to do.”

Lungisa says

Mapu’s ap­point­ment as act­ing city man­ager was rat­i­fied by the coun­cil on June 29, and the metro now has a per­ma­nent CFO in Sel­wyn Thys. “The Trea­sury had said we must fill the va­can­cies, which we did.”

Buy­eye’s spokesper­son, Siyanda Mx­otwa also tells the FM the city has com­plied with the

Trea­sury’s re­quire­ments: it’s passed the bud­get and ap­pointed an act­ing city man­ager, among other things. It’s also work­ing on ap­point­ing a per­ma­nent ex­ec­u­tive mayor and per­ma­nent city man­ager.

“The coun­cil has ap­proved a process, with all par­ties in­volved, [through which] the next coun­cil meet­ing in the next seven days should deal with the is­sue of the mayor,” says Mx­otwa.

But Bhanga, the leader of the of­fi­cial op­po­si­tion in the prov­ince and a coun­cil­lor in the metro, is not im­pressed. “The only thing hap­pen­ing in this metro is in-fight­ing,” he says. “We have an in­ca­pable act­ing ex­ec­u­tive mayor. As a re­sult, peo­ple are go­ing to die be­cause of Covid19 and the city is go­ing to col­lapse be­cause of mal­ad­min­is­tra­tion.”

Ca­pac­ity is a very real con­cern in the face of Covid-19. By late June al­ready, na­tional health min­is­ter Zweli Mkhize warned that NMB’S hos­pi­tals were “burst­ing at the seams”, with too many pa­tients and too few staff.

This week, The Her­ald re­ports that all hos­pi­tals in the metro — public and pri­vate — are full, and pa­tients are be­ing taken to field hos­pi­tals to re­lieve pres­sure on the health sys­tem.

NMB is the site of two field hos­pi­tals. A fa­cil­ity at the NMB sta­dium came on­line on June 1, adding 1,500 beds to the metro’s tally, says health MEC Sindiswa Gomba. The Rev Dr El­iz­a­beth Mamisa Chab­ula-nxi­weni field hospital, sit­u­ated in an old Volk­swa­gen SA as­sem­bly plant, be­gan tak­ing ad­mis­sions last week. In its first phase, it will pro­vide 1,485 beds, with ca­pac­ity of 3,300 on com­ple­tion.

At the re­quest of Mabuyane, a con­tin­gent of nurses and other health-care spe­cial­ists from the SA Na­tional De­fence Force ar­rived in the prov­ince on Sun­day. The 75 spe­cial­ists will be de­ployed in NMB to of­fer health-care re­lief.

While Mx­otwa says the metro’s health-care sys­tem is “un­der siege” from Covid-19, with more quar­an­tine sites ex­pected to come on­line, “the city is in a ready mode”.

For her part, MEC Gomba be­lieves things have im­proved. “The sit­u­a­tion at the metro’s hos­pi­tals is not as bad as it might have been pre­vi­ously. The hos­pi­tals are ad­mit­ting peo­ple and our work­ing re­la­tion­ship with the mu­nic­i­pal­ity has not bro­ken at all,” she says. “We have not heard of any chal­lenges re­gard­ing ser­vices ren­dered by the mu­nic­i­pal­ity.”

But busi­ness re­mains con­cerned.

Mona tells the FM that the Covid-19 out­break “ex­posed all the struc­tural cracks in the foun­da­tion of our city”.

She points out how, when the city be­came an epi­cen­tre of the out­break, the pri­vate sec­tor had to step in. “[The pri­vate sec­tor] fixed hospital wards, do­nated beds, PPE [and] test­ing equip­ment, fa­cil­i­tated the do­na­tion of other med­i­cal equip­ment as well as the fully kit­ted field hospital do­nated by Volk­swa­gen SA,” says Mona. She puts the value of th­ese do­na­tions up­wards of R130m.

But busi­ness is wor­ried, “as the health-care sys­tem is on the brink of a po­ten­tial col­lapse”.

Mona says the cham­ber’s role is not to only point out what doesn’t work; it’s also on record as hav­ing of­fered to sec­ond ex­perts to the metro from its mem­ber com­pa­nies to as­sist with back­logs and the tight­en­ing of var­i­ous sys­tems — at no cost to the coun­cil.

“That of­fer re­mains on the table — we are will­ing to con­struc­tively en­gage with the NMB mu­nic­i­pal coun­cil to as­sist with the for­mu­la­tion of mean­ing­ful in­ter­ven­tions re­quired to [stop] the down­ward spiral,” she says.

That may now be more im­por­tant than ever. “While the health-care prac­ti­tion­ers should con­tinue fight­ing the war on the front­line,” Mona says, “eco­nomic prac­ti­tion­ers should be con­cerned about eco­nomic re­cov­ery – in­tro­duc­ing spe­cific strate­gies on al­le­vi­a­tion of poverty, preven­tion of job losses, in­crease busi­ness sur­vival and re-skilling the work­force.”

What level of dys­func­tion would ne­ces­si­tate a mu­nic­i­pal­ity to have no less than 11 act­ing city man­agers in 18 months? The chaos that en­sues is unimag­in­able

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