The SA Municipal Workers’ Union (Samwu), the country’s largest union in the local government sector, says it welcomes the Treasury’s decision to inject R450bn into struggling municipalities.
According to the department of co-operative governance & traditional affairs’ local government barometer, “64 municipalities are currently dysfunctional, 111 on the brink of dysfunctionality, while only 16 out of 257 are stable”, said Dumisane Magagula, the union’s general secretary.
“The challenges faced by these municipalities are financial in nature. In Kopanong Local Municipality in the Free State, workers have not been paid their salaries for three months,” he said.
Magagula said several municipalities are deducting money for third parties such as medical aid, pension fund and funeral policies from workers’ salaries but this money never gets to the third parties, resulting in the lapsing of policies.
Samwu, which represents about 160,000 of the country’s 300,000 municipal workers, said the challenges faced by municipalities necessitate the need for such interventions by national and provincial governments. “This would ensure that municipalities are stabilised to ensure continued and improved service delivery to residents.”
The SA Local Government Association (Salga), which represents all the municipalities, did not respond immediately to a request for comment.
The country’s 257 municipalities, which are at the coalface of service delivery, have received a shot in the arm with an allocation of more than R450bn from the fiscus over the 2022 medium-term expenditure framework.
Delivering his maiden medium-term budget policy statement on Thursday, finance minister Enoch Godongwana said the government’s immediate task is to build capable local government that delivers services effectively and efficiently.
Some of the municipalities have been run into the ground because of maladministration, looting and corruption, while others are struggling to pay staff salaries and employment benefits or deliver the basic services such as refuse collection, supply of potable water and sanitation.
Clover in June announced plans to move its cheese factory, the largest in the country, from Lichtenburg in the North West to Queensburg in KwaZulu-Natal, citing poor service delivery by the municipality as the main reason for relocating.
Auditor-general Tsakani Maluleke told parliament in June that during 2019/2020 the number of clean municipal audits declined from 33 to 27, while fruitless and wasteful expenditure amounted to R3.47bn, a big part of which was the loss of billions of rand because of interest and penalties.
Irregular expenditure amounted to R26bn, with widespread non-compliance with supply chain management legislation being a big contributor.
In his address last Thursday, Godongwana said there are 43 municipalities countrywide “which are in financial crisis, with another 100 at risk of similar crises”.
“To deal with the 43 municipalities already in crisis, I have specified the expected course of action to be taken by all premiers, the provincial Eecos [executive committees] and MECs in ensuring that problems in these municipalities are dealt with in a more sustainable manner,” the minister said.
This is in line with the government’s commitment to ensuring sound fiscal management and greater fiscal responsibility in the local government sphere. Godongwana called on the newly elected councillors to work hard to improve the state of their municipalities, and to “co-operate with the support initiatives of provincial and national government”.
In August 2020, the Treasury agreed to take a more active role in monitoring municipal finances to help bring back financial stability and address the twin problems of corruption and political interference.
This was after the budget forum, a platform that comprises the minister, the country’s nine finance MECs and representatives of Salga, had resolved that the Treasury will take a lead on local government financial management matters, while the department of co-operative governance & traditional affairs will monitor governance and service delivery efforts.
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