About two-thirds of SA’s 257 municipalities are in financial distress and require assistance from the National Treasury, according to director-general Dondo Mogajane, who said the Treasury cannot cope with the situation.
Of the 257 municipalities in the country, about 170 are in financial distress and need Treasury involvement, Mogajane said in parliament on Wednesday. Finance minister Enoch Godongwana has also noted that 43 of the worst performers meet the criteria to be placed under mandatory intervention by the national government in terms of the constitution.
“The challenges are just too many,” Mogajane said in reply to a question by ANC MP Noxolo Abraham at a parliamentary briefing on the Treasury’s performance in the fourth quarter of the 2021/2022 fiscal year.
Mogajane’s response is perhaps the starkest assessment yet of the extent of the failure of local governments to deliver basic services and of the national government’s inability to deal with the crisis, which has seen many towns and municipalities rendered dysfunctional.
Ratepayers bear the brunt of the malaise, with persistent complaints of raw sewage in potholed streets and a lack of water and electricity. Residents in several municipalities have resorted to fixing the neglected infrastructure themselves.
Businesses have also been hard hit. Last year, poultry producer Astral obtained a high court judgment, which ordered the national government to take over the Lekwa municipality in Mpumalanga and to prepare a financial recovery plan for it. This was because poor service delivery had negatively affected its operations.
Also last year, dairy company Clover began moving its cheese factory in Lichtenburg in North West to eThekwini at a cost of R1.6bn because of electricity and water disruptions and impassable roads.
“Only a handful of municipalities are performing,” Mogajane said. “If it’s about improvement in financial management and oversight ... we can do that, but if the system of oversight and governance is not functioning in the whole of SA, then the National Treasury cannot do it.”
Though municipal councils and oversight bodies are expected to hold senior officials accountable, this isn’t happening because “politics is in the space, it is in your face in municipalities”, he added.
“The dysfunctionality in many municipalities is as a result of political squabbles,” and there are even instances of towns having two municipal managers, he said.
“Until there is sanity about how politically these matters should be dealt with, the Treasury can try to do things on the margins but we will not cope,” Mogajane said, adding that it isn’t in the Treasury’s sphere to get involved in political battles. The long-term solution is for politicians to hold each other accountable on these matters.
Mogajane’s sentiments echo those of Godongwana, who said during the debate on his budget vote in parliament last week that the situation in municipalities is “bad”.
“We are faced with the formidable challenge of an increasing number of municipalities which are dysfunctional either experiencing financial distress or even having deteriorated into crisis,” he said.
Assistance for local government is being stepped up, Godongwana said, with the help of the department of co-operative governance & traditional affairs. Measures include direct interventions in terms of section 139(7) of the constitution, such as in Lekwa and more recently in the Mangaung and Enoch Mgijima municipalities.
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