A ratings agency has called on the government to pump billions of rand into local government to enable municipalities to deliver services and fix infrastructure that is “crumbling at a pace previously unheard of”.
In its annual municipal financial sustainability index of the 100 largest local municipalities and the eight metros, Ratings Afrika analysts Leon Claassen and Charl Kocks said the decline in metros is concerning as they are considered to be the economic engines of the economy.
The agency said service delivery failure by the metros will damage the economy immeasurably.
Most of the country’s 257 municipalities, which are at the coalface of service delivery, have been run into the ground due to maladministration, looting and corruption, while others are struggling to pay staff salaries and employment benefits, and deliver basic services.
President Cyril Ramaphosa, addressing the national conferences of the SA Local Government Association (Salga), the employer body representing the country’s 257 municipalities, in Cape Town in March, implored mayors, councillors and government representatives to turn local government around, saying service delivery was a crucial enabler of economic growth and development.
Gauteng’s 15-million residents have been receiving poor service delivery from municipalities in SA’s economic powerhouse, which contributes about 35% to GDP.
In 2020, Gauteng was named the seventh-largest economy in Africa, but the province suffers an unemployment rate of 37%.
In the City of Joburg, which contributes about 15.6% to SA’s GDP, service delivery challenges include the ageing electricity and roads infrastructure, the supply of housing and potable water, hijacked buildings, cable theft, as well as unemployment, which is at more than 40%.
Joburg executive mayor Mpho Phalatse had a heated exchange over service delivery with former DA leader Tony Leon on Twitter recently.
Reacting to a tweet about Phalatse closing a strategic planning session, Leon had remarked, “Fix potholes, traffic lights and pavements. That, far more than strategic planning sessions, will win the allegiance of your voters.”
Repairing infrastructure
In Ivory Park near Thembisa, raw sewage flowing onto the road is a common feature. A few kilometres away on the R562 in Olifantsfontein, a set of traffic lights that were damaged and set alight during a service delivery protest more than a month ago are yet to be fixed.
But the city’s leadership says it is working on repairing infrastructure. Joburg mayoral spokesperson Mabine Seabe said the multiparty government’s R77.3bn budget to repair and rebuild the city kicked in on July 1.
“Joburg’s 6-million residents have already begun to see and feel a difference in better service delivery over the last few months, and that will become even more pronounced over the next few months. Of course, repairing and rebuilding a broken city will take time but rest assured … Phalatse and her team are determined to give Joburg back its shine,” Seabe said.
Tshwane, another Gauteng metro, has been battling water supply outages to the chagrin of residents and business owners. According to ANC Tshwane regional chair Eugene Modise they have been “subjected to a very unfriendly situation since the DA took over the city in 2016. They are hell-bent on reversing the gains of our people.”
Modise said water challenges in the metro are a serious concern. “The city has been facing challenges with water supply interruptions for some time now. They [the DA] don’t care about the welfare of our communities. They don’t care about the black communities.”
In his state of the city address in April, Tshwane executive mayor Randall Williams said his administration would focus on 10 strategic areas to fast-track service delivery in the capital city. These included prioritisation of the electrical grid and water infrastructure; stringent financial management and oversight; and maintenance and expansion of road infrastructure and public transport.
In launching the 2020/2021 local government audit outcomes in Tshwane in June, auditor-general Tsakani Maluleke said only 41 (16%) of the country’s municipalities achieved unqualified audits, 100 (38%) achieved unqualified audits with findings, 78 (30%) qualified with findings, 4 (2%) adverse with findings, and 25 (10%) achieved disclaimers — the worst possible audit outcome.
Financial collapse
Joburg and Tshwane incurred a combined irregular expenditure of R3.8bn in 2020/2021.
In their report, Claassen and Kocks said the local government sector is “about to collapse financially, and it is time for the government to acknowledge it seriously and start taking the necessary steps to save the country from disaster”.
Municipalities and their entities were responsible for an estimated expenditure budget of R509bn in 2020/2021, according to the auditor-general.
Claassen and Kocks said residents and businesses continue to suffer from poor service delivery, and economic growth “is jeopardised by the inability to maintain and develop infrastructure”.
“Government needs to realise in more practical terms that well-run, efficient municipalities that provide high-quality services to its residents and support local businesses, are the underpinning to economic growth and prosperity of the country,” the analysts said.
“To prevent a total collapse of these municipalities, the only solution is for the government to bail them out to the amount of R54bn. This will only bring the municipalities onto a level footing to pay their creditors as stipulated by the MFMA [Municipal Finance Management Act]. Unfortunately, this R54bn charge will have to be borne by already overburdened taxpayers.”
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