In June, BizNews published an eye-opening piece about the state of municipalities in South Africa. According to MyBroadband, approximately R186 billion rand had disappeared from municipalities across the country. More worryingly, is that of the 257 various municipalities, just 27 had received clean audits. Not only does this highlight the blatant corruption happening at a local government level, but also calls attention to the sheer amount of money diverted away from those who really need it. As a result, SA citizens are deprived of basic social services, like refuse collection and proper sanitation infrastructure. Below, Jonathan Katzenellenbogen writes that most municipalities in SA are in crisis, with the “services they provide are fast deteriorating.” – Jarryd Neves
Jonathan Katzenellenbogen
Most local governments in South Africa are in crisis, and the services they provide are fast deteriorating. There is no convincing nationwide plan to get out of the mess.
The mammoth scale of the crisis in local government is reflected in the potholes, litter in the streets, sewage running down roads, and abandoned shops in most platteland dorps. Some consequences of the decline are an enormous wastage of public resources, deteriorating infrastructure, value destruction in the economy, millions of under-serviced people, and a rise in poverty.
Last month Clover, one of South Africa’s largest dairy companies, said it planned to close its cheese factory in Lichtenburg in North West province, after years of service delivery problems. That drew national attention, but businesses have been fleeing dorps for ages. Earlier this year, poultry producer Astral Foods had to resort to a court order against the government and the Treasury following a cut in power and water in Standerton. The town had been unable to pay for water and power and Treasury had taken over.
“We have seen little evidence of our messages being taken to heart,” says the Auditor General, Tsakani Maluleke, in her latest annual report on municipal finances. She says nothing is being done to improve accountability or deal with deep-seated problems.
In the 2019/20 financial year, only 27 of the 257 municipalities in the country, less than 11 percent, received clean audits. From year to year there is no dramatic change in the number of clean audits, and only seven municipalities have been able to sustain their clean audits over a four-year period. Four of these are DA-ruled areas in the Western Cape, but the province still has its problems with corruption and irregular spending.
At its root, the problem of most municipalities and certainly the most troubled ones is the overwhelming dominance of one party, the ANC. Low levels of political competition in these municipalities mean that the ANC is not worried about losing elections. Hence there is little incentive for councillors or municipal managers to be accountable to the electorate. There is a strong incentive for councillors and officials to defer to the party machinery. There is the additional problem of cadre deployment to municipal management, which means the displacement of technocrats. It is a system that easily breeds inefficiency and corruption.
The DA faces tougher competition where it rules. In the Western Cape it faces serious competition from the ANC as well as a multitude of smaller parties.
There are a few exceptions to the disastrous state of municipalities where ANC rules goes unchallenged. The Senqu municipality in the Eastern Cape has received a clean audit for the past seven years. That comes down to solid leadership from the Mayor, Nomvuyo Mposelwa, and no interference with good and long-standing technical staff, says this article on TimesLive. Senqu has a municipal manager, Mxolisi Yawa, who has been on the job for the past 20 years, and a chief financial officer, Kenneth Fourie, who is allowed to get on with his job. A staff of 400, all with degrees and diplomas, report to him.
The replication of the Senqu model would be ideal, but it is unlikely to happen as it takes years for such a culture of solid management to be built. What makes the Senqu story so exceptional is that it is a shining light in the Eastern Cape, an ANC-ruled province with extreme failures in governance.
The example of Senqu shows that with exceptional leadership, one-party dominance need not necessarily be the problem. But with greater political competition there is a high chance of greater pressures on the party in power to raise its game.
Don’t expect any big changes at the local government elections later this year. There is an often-debated question of why voters re-elect a party that fails to deliver. One reason might be that having long endured poor service, voters do not expect dramatic improvements.
The DA competes widely, but it is hardly about to mount a challenge to the ANC across the country later this year. Former DA leader Mmusi Maimane’s One South Africa movement wants to promote independent candidates and take local government out of party hands, but it has a difficult task ahead and will not compete widely. Herman Mashaba’s Action SA will face its first test at the local government elections, but it has a tough task ahead.
The Auditor General points out that for any turnaround, there will have to be “consequences for accountability failures.” China hands out jail and death sentences for corruption. A number of mayors and deputy mayors have faced execution for corruption in recent times. Even if one is opposed to the death penalty, one has to admit it can act as a strong deterrent. But what matters most is the chance of getting caught and prosecuted, and this has proved to be a very slight chance in South Africa.
Government says it has a plan to address the crisis with its “District-based Development Model” that would centralise a lot of functions. Under the plan, the Cooperative Governance and Traditional Affairs department, the Treasury, and other agencies will work through “district hubs” to ensure municipalities have skills and services that are in short supply. With government unable to deal with severe corruption and improve service delivery, this plan might be overly ambitious. It would also bring in another layer of government, which tends not be a good idea. And giving badly managed municipalities more money could compound problems.
A non-profit, South Africa Day, helps communities in small towns to come up with strategies to arrange clean-ups and repairs. These involve township residents, businesses, and farmers working together with the municipality. In one ongoing project, the Senekal Matwabeng Community Forum has so far filled more than 4 000 potholes as well as re-tarred a number of roads in the Free State town.
While such projects serve a good purpose, these initiatives mean that ratepayers are having to pay their rates and then give further resources to an already failing municipality. It also means that corrupt and inefficient municipalities are taken off the hook despite corruption and sheer inertia. But if you don’t want to live in a collapsed town, there are no alternatives.
Sakeliga, which represents 12 000 businesses across the country, is taking municipalities and national government to court over dereliction of duty on municipal governance. In Lichtenburg, Sakeliga was able to obtain interim relief with a court order for the appointment of a special master. The resort to the courts could help, but the deeper problem of the country’s municipal disaster still remains.
What is in short supply to solve the problem is good leaders who care about the towns in which they live. It also requires that the inefficient are fired and good law enforcement exists to ensure the corrupt are prosecuted. As the Auditor General makes clear, there have to be consequences for failing to do the job.
This article was first published on the IRR's online platform, the Daily Friend.
Jonathan Katzenellenbogen is a Johannesburg-based freelance financial journalist. His articles have appeared on DefenceWeb, Politicsweb, as well as in a number of overseas publications. Jonathan has also worked on Business Day and as a TV and radio reporter and newsreader.
https://www.biznews.com/thought-leaders/2021/07/07/municipalities-in-crisis-sa
