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Report: Municipalities unviable

Many South African municipalities – specially in rural areas – will never be able to raise the revenue they require to function.
Image: Shutterstock

Many South African municipalities – especially in rural areas – will never be able to raise the revenue they require to function, Deputy Minister of Cooperative Governance and Traditional Affairs Obed Bapela admitted in Parliament on Thursday.

Bapela took part in an oral question and answer session in the National Assembly to Cabinet’s economic and social cluster, which was attended by only one Cabinet member, namely Minister of Women, Children and People with Disabilities Maite Nkoana-Mashabane.

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All other Ministers preferred to send their deputies.

Bapela’s reference to the sustainability of municipalities arose from a question regarding the impact of Covid 19 on municipal finances.

Big increase

Bapela said that consumer debt to municipalities had increased by 20.4% in the last six months of last year. Whereas in June last year the monies owed to municipalities had been R193 billion, by December last year it had reached around R230 billion.

According to Bapela, it needs to be accepted that many municipalities, especially in rural areas, have never been able to and will never be able to collect enough revenue to be sustainable due to local poverty, hunger, unemployment and lack of opportunities.

The deputy minister believes the answer lies in a new funding model currently being negotiated by the government. In the meantime, as has been announced by President Cyril Ramaphosa, a top-up amount of R20 billion was budgeted for municipalities to deal with Covid 19 related challenges.

DA MP Cilliers Brink tried to raise specific municipal failings in the JB Marks Municipality (Potchefstroom) and Lekwa Municipality (Standerton) with Bapela, but the deputy minister would not be drawn. The same fate befell FF Plus MP Michal Groenewald regarding the Kgetlengrivier Municipality in Koster, North West.

Unaudited 

Earlier, prodded on the long-delayed issue of lifestyle audits for Cabinet Ministers, Deputy Minister in the Presidency Thembi Siweya kicked the can down the road again, almost three years after such was announced by Ramaphosa as head of state.

Whereas the former Minister in the Presidency, the late Jackson Mthembu, had given the undertaking that the lifestyle audits would be implemented by 31 March this year, Siweya blamed Covid 19 and the untimely death of Mthembu in delaying it by a further full year to 31 March next year.

When DA MP Solly Malatsi pointed out that Western Cape Premier Alan Winde completed the whole exercise from announcement to final implementation within nine months because he had the political will to do so, Siweya said it was only one province and that the Presidency took care not to make any mistakes it would later have to correct.

Delayed

Regarding the plight of presidential spokesperson Khusela Diko, who is facing allegations linked to corruption, Siweya said her disciplinary hearing was supposed to take place on February 24  but the Presidency has agreed to postpone it to March 25 in light of the death of Diko’s husband.

Reacting to a question from DA MP Dr Mimmy Gondwe, Deputy Minister of Public Service and Administration Sindisiwe Chikunga said two employees of the Government Employees Medical Scheme (GEMS) were dismissed and a further five had resigned after corruption to the extent of R300 million had been uncovered.

Chikunga also said that the latest figures regarding the number of public servants suspected of and thus investigated about doing business with the state had declined from 1 539 last year to a current figure of 484 people.

The deputy minister asked anyone with information about such alleged malfeasance to come forward, even as she admitted under questioning by Freedom Front Plus MP Heloise Denner and ACDP leader Rev. Kenneth Meshoe that Government believed itself powerless to act against civil servants who resign when they face disciplinary charges.

Chikunga refused to be drawn on the vexed issue of union demands and negotiations on the public service wage bill, saying that such negotiations should be limited to the Public Service Co-ordinating Bargaining Council (PSCBC), and not Parliament.

COMMENTS   21

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You don’t need to be a professor or have a PHD in Economics to see that.

Anyone with a Grade 4 qualification could tell you that.

Problem is that the people running those municipalities only have Grade 3!

“Consumer Debt to Municipalities has risen”

What the article fails to mention is that theft and corruption is the main reason that not only ANC run Municipalities, but the entire ANC run Government is bankrupt

Why do Municipalities need Mayors earning millions every year?
In the days of old, a Mayor was usually an intelligent professional which function was ceremonial with a day job in the private sector

It’s sad to witness how we have allowed the ANC to demolish our Cities and rural towns..Municipalities non functional..What are the Ministers doing about this? Where is the DA? Silent?? Cpt their only priority

The rural towns are overrun with foreigners..and the ANC/EFF have the audacity to blame WMC when our own “brethren” are too lazy to run businesses in rural towns themselves, rather opting to work for foreigners

Tenderpreneurs and nepotism is pandemic and so deeply entrenched within the ANC structure, easy money for the comrades..

And Cyril et al just looks on ..

One has to beg the question why? It’s all to clear he’s not there to clean up, he’s been put there as a puppet to pull the wool over our eyes

“will never be able to collect enough revenue to be sustainable due to local municipal officials’ theft, poverty, hunger, unemployment and lack of opportunities”. There, I fixed it for you.

Eventually, the cruel reality, that we have been telling them all along, dawned upon them. No force on earth can protect a collectivist voter from himself when he uses the power of his vote to turn his environment into a manifestation of his mindset.

The free-market and property rights offer the solution though. A single barbed-wire fence divides the commercial farmer with his title deed, his running water, electricity and a flush toilet on one side, and the collectivist communalist without running water, sustainable electricity supply and zero hygiene services, not even a pit latrine, on the other side.

The factors of production, namely the weather, soil type, genetic material of animals, cost of capital and labour, and access to finance, are the same for all the parties. The one single dividing factor between prosperity and backwardness, as presented by the barbed-wire border fence, is the title deed.

your summary is as succinct as it is tragic

I travelled throughout the country in the 1980’s – 90’s as a rep to so many of these small towns and everything worked. So what happened? The ANC ….

They have the revenue, the problem is using goats and sheep as currency was phased out here 400 years too early…

What we have here is a THIRD WORLD country, with (slowly evaporating) “pockets of excellence”, run by an African regime.

The “pockets of excellence” referred to those (still great, but declining) sections of the country under ANC-rule, e.g. Sandton, JHB North, Umhlanga/Ballito and related areas, etc…plus almost the entire DA-run munis in the W/Cape.

…..for the rest, being the THIRD WORLD part, being Mpumalanga, Limpopo, Eastern Cape, FS & NW….with all their rural towns under ANC-control. All steadily reverting back to tribal value systems and related efficiency (people with Western-centric values will call it “chaos”).

For these 3rd world areas, the word “excellence” will be mutually exclusive.

You cannot have a system where people are employed & paid well based on ethnicity/skin colour, yet are unsuitable for the job. This is the obvious result after 26 yrs, and will get worse.

Scary reading. Think Governments around the world have to rethink how they’re funded. However in the case of SA muni’s basic administration has not been completed properly, the wastage and corruption is the first thing that needs to be sorted out, before the funding problems are sorted.
It is rather scary that basic accounting principles that are learnt in school are not been applied.
The issue of SA muni’s is not just about the management of them, the macro economic policies and wastage, corruption etc are now playing like a negative feedback loop. The anti business sentiment from the ANC is starting to affect one on the local level, there’s little or no employment so there’s little or no income for the muni’s. What is scary is that the government seems to be unable to connect the dots and sticks to their chosen doctrine(s).
I’m starting to wonder if democracy works besides the corruption, this funding and spending problems of the State is not unique to SA. Democrats in the USA are starting to sound like Socialist.
It is almost as if the mood has turned from looking after oneself to been looked after.
If we as a collectives want a governments that pays for everything, then tax needs to be very high indeed, high savings rate and little cash left over for discretionary spend. I’m afraid that doesn’t sit well with the current mindset

As a result of the theft, corruption and no management these rural towns now have no doctors, no schools, no pharmacy, no banks, no garbage collection, no value, no hospitals, no water and soon no electricity.

To top it the ANC wants to implement EWC and resettle urban blacks in the platteland. Ha ha they have made the once attractive rural lifestyle so inhospitable no one will want to move there.

It has also made farming more difficult, so a hazardous profession has just become even more hazardous. The ANC thinks all their voters want to farm??? think again and so will your potential farmers.

These municipalities used to function well in the past, even if there was a slight subsidisation for some.

The problem is the ANC corruption.

Not only corruption.
– inflated salaries ,
– inflated number of civil servants,
– no performance reviews to pay those that put in extra ,
– lack of skills

To name a few

The European way of life/idealogy was never going to work in Africa – it’s utterly unsustainable even in European countries AND their (african) collective unconscious/spirit is trying to get rid of it by unconsciously driving them to destroy it. It’s really that simple.

Just as your body will try its best to rid itself of any gems/bacteria that disburb its natural flow and harmony. We may think Africans are dumb, slow, corrupt, lazy, lousy or have low IQ levels but I think we are to blame for their stasis because we want to keep the unsustainable”machine” going and pumping profits whereas they unconsciously want to get rid of it or drastically change it to align with their unconscious needs.

The European way of life/idealogy was never going to work in Africa – it’s utterly unsustainable even in European countries AND their (african) collective unconscious/spirit is trying to get rid of it by unconsciously driving them to destroy it. If you understand human psychology and how nature works, you’d realise what’s really going on.

Just as your body will try its best to rid itself of any gems/bacteria that disburb its natural flow and harmony, they are destroying/trying to change what is bringing them imbalance.

…i.e. merely a change in demographics at play, that’s all. Along with “decline” based on Western norms & measurement.

The more people with a skilled, western and capitalist mindset move out of SA, the less modern SA will become.

The notion that “The more people with a skilled, western and capitalist mindset move out of SA, the less modern SA will become” is not true because it assumes that western modernization is the only and best standard for what a “modern” society is or should be even though it’s failing in both it’s home countries and the countries where it was forced on the people and it also assumes that there’s not enough Africans with the right skills to run a complex society. My point is that we’re biologically different, therefore we’ll have a unique vision/view of what a modern society looks like. For instance, you look at the concept of Ubuntu in Africa, our western society despises it and we call it Communism yet in Africa it’s part of their collective history, this is how they’ve always lived and it may be that for them to flourish as a race and a people, their society has to be founded on communistic principles. If that’s the case, then let them find a way to make it work because it’s what their collective spirit wants, needs or gravitates towards.

Nature didn’t create a single race with a single consciousness but rather created different races, each with it’s own unique consciousness that influences what each race naturally gravitates towards, how it sees and interfaces with the world around it. Being ignorant of the fact that we’re all different therefore have different needs seems to be the root cause of the unconscious view that somehow Africans cannot make it work on their own.

Future formula : Pay your rates and taxes to the ANC parasites , but do the work yourselves.

Pre ‘95. Rates and taxes was paid by a few and services was channeled to a few.
Since then a few who pays has to service more areas .

Finally , This funding question is being asked after the euphoria has died down 25yrs later

Pre 94 the city and town counselor were unpaid. It attracted a class of person that had considerable life and business experience and they put the interests of the town or city first.

Just think how much can be saved on the salaries of all these counselors in the smaller municipalities, that can rather be used for services.

“According to Bapela, it needs to be accepted that many municipalities, especially in rural areas, have never been able to and will never be able to collect enough revenue to be sustainable due to local poverty, hunger, unemployment and lack of opportunities.”

The problem is staring them in the face and solutions are obvious for anyone with a basic understanding of economics. Reduce the size of government (and inefficient government spending), and reduce government restrictions on business (minimum wage, regulations, taxes, red tape etc. etc.). Rather “top up” local municipalities with deficit spending at the national level..

As Hayek said: “If socialists understood economics they wouldn’t be socialists.”

End of comments.

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