By Lwazi Sikiti, South African Cities Network*
As our seventh administration executive settles into their portfolios, we must remember the hand-in-glove relationship they need to forge in working within and supporting the local government sphere in South Africa.
The national and provincial governments have the challenging task, as required by the Constitution, of supporting approximately 257 municipalities across the country in meeting their mandates.
The current state of the local government sector in South Africa can be characterised as being in a state of crisis. This not only threatens the delivery of essential services but also puts the very fabric of local governance at risk.
The financial health of municipalities remains a critical concern that requires immediate and comprehensive reform to prevent further deterioration and to foster sustainable development at the local level.
Municipalities in South Africa face significant financial challenges due to systemic inefficiencies, maladministration and insufficient revenue generation.
The 2023 Auditor-General’s report revealed mixed performances in the local government sector. It found that 33 municipalities had better audit outcomes than in previous financial years, while 29 had worse outcomes. The report also indicated that many municipalities were in financial distress and unable to meet their obligations.
Consequently, some municipalities had experienced waves of service delivery protests, leading to a gradual erosion of public trust in this vital sector of our democratic government.
One of the main challenges facing municipalities is the insufficient revenue base to sustain their operations. A significant factor contributing to this is the poor collection of local taxes and service fees, often due to inefficiencies and a culture of non-payment among residents.
Compounding this issue is the widespread problem of poor billing systems across municipalities and a lack of enforcement mechanisms to ensure that residents, businesses and state agencies pay their debts.
Local governments rely heavily on grants from the national government, but these grants often do not cover all their expenses, resulting in some vital expenditure items being unfunded mandates. This creates a vicious cycle where municipalities lack the funds to improve services, leading to further non-payment and financial strain.
Skills shortage
Another critical issue is the need for more capacity within municipalities. Many local governments suffer from a shortage of skilled personnel, particularly in financial management and planning. This hampers their ability to manage their finances effectively and develop sound economic strategies to support sustainability.
One solution to this problem involves implementing targeted training programmes for local practitioners and councillors. Municipalities must attract skilled professionals to the local government sector to improve financial management.
The seventh administration’s support of the local government sector remains urgent and challenging. The priority involves numerous interventions to improve the revenue collection mechanisms of our municipalities by modernising billing systems, enhancing enforcement measures against defaulting payers and promoting a culture of payment.
Innovative approaches, such as leveraging technology for better tracking and collection of fees, will undoubtedly play a significant role in addressing this revenue collection challenge.
The second critical intervention for the administration should be implementing strong measures to reduce maladministration in our municipalities. This should include increasing transparency and accountability in governance and ensuring inclusive practices in municipal planning and the delivery of essential services to citizens.
It should also involve strengthening the oversight functions of the national and provincial government on the business of local government. At a local level, augmenting support for oversight institutions undoubtedly also involves the empowerment of council oversight bodies such as the municipal public accounts committees in enforcing accountability in how public monies are spent.
Training
The third intervention is to invest in capacity-building mediations that involve training programmes and mentorship networks involving local and international actors, as well as all-of-society partnerships with the private sector and civil society groups that are equally vested in the success of municipal service delivery.
These interventions must equip municipal leaders and officials with the necessary skills to effectively dispatch their duties while empowering the public to understand their rights and recourse in holding their local government accountable without resorting to service delivery protests.
Last, an in-depth review of the local government fiscal framework is needed to ensure that municipalities receive adequate funding to maintain existing infrastructure and build new infrastructure commensurate with their population growth.
The financial health of municipalities in South Africa is a linchpin for the overall development and stability of the country. Addressing the deep-seated issues plaguing municipal finance is not only essential for improving service delivery and infrastructure, but also for restoring public trust in local governance and, indeed, our democracy itself.
Through enhanced revenue collection, strengthened governance, capacity building and reforms in fiscal relations, South Africa can steer its municipalities towards a path of financial sustainability and effective service delivery.
The success of local government depends on adequate attention and support from the national and provincial governments.
*Lwazi Sikiti is the Policy Research and Advocacy Manager at the South African Cities Network.
