Disastrous state of local government beggars belief

Local government is a mess. This has become a common refrain that is hard to dispute not only because of the state of many municipalities but also because it has been confirmed in recent reports.

For instance when releasing the 2019/2020 municipal audit results the auditor-general made clear that only 10% of municipalities managed to get a clean audit over a quarter are in doubt as going concerns and nearly a third ended the year running a deficit. Finance minister Tito Mboweni reported in parliament that 163 municipalities (almost two thirds) are facing financial distress.

For South Africans following local government news stories or living in an ill-functioning municipality such laments are no longer a shock or even news. The auditor-general tells the story of a municipality in the Eastern Cape that bought the mayor a new car with Covid-relief funds last year. As appalling as this is it hardly raises an eyebrow.

What has caused concern with hundreds of jobs on the line is Clover packing up shop in Lichtenburg because the local municipality Ditsobotla is unable to provide a minimum level of services. Of course this is of little surprise in a municipality with two contesting mayors and a state of provincial section 139 intervention.

Less well publicised is the subsequent threat by beverage maker Twizza in Enoch Mgijima (Komani) to stage a similar relocation due to service interruptions despite repeated attempts by residents to engage provincial structures. Also in the Eastern Cape Makana residents have taken court action to dissolve their municipality where provincial interventions have failed as miserably as they have in Ditsobotla. Most recently the Eastern Cape provincial government has spent most of its time resisting court-ordered dissolution of the potholed water-deprived municipality.

From a policy perspective these cases are of deep concern. If manufacturers move from dysfunctional towns to more functional cities it will result in the hollowing out of fragile rural economies simply because municipalities are failing to provide basic services. It also means there will be more pressure on larger cities and metros which are already under pressure from in-migration — one of the contextual reasons cited by Moody’s Investors Service in its recent four-notch downgrade of SA’s administrative capital Tshwane.

So where is the greatest pressure evident in local government?

Using data from Municipal IQ’s ICU unit which combines proxies for service delivery with governance and compliance indicators 42% of municipalities are flagged on our watch list for worryingly poor performance with 18% falling into high-care or ICU status. In the North West 82% of municipalities are on this list followed by 74% in the Eastern Cape 56% in Limpopo and 48% in the Free State.

Of those municipalities that are flagged most (more than 40%) are “B2” municipalities populated with medium and smaller towns followed by “B3” municipalities which incorporate groups of small towns (20%) as well as “B4” rural municipalities (13%).

B2 municipalities rely heavily on local sources of revenue and management of the different aspects of this own revenue from billing to client interaction is key to maintaining it at healthy levels. B3s and B4s by virtue of their constrained local revenue bases have ironically been able to rely on more predictable grant funding for their revenue which may explain why these municipalities do not face the same challenges and contractions in revenue as B2s.

The names of these municipalities have now become synonymous with municipal incompetence malfeasance failure and collapse: Ditsobotla Madibeng Kgetlengrivier JB Marks Emfuleni Lekwa Matjhabeng Maluti-a-Phofung Enoch Mgijima and Makana to name but a few that have hit the headlines.

Each of these municipalities is being run by a group of elected councillors led by a mayor and a speaker employing officials managed by a municipal manager CFO and departmental heads all of whom are being paid salaries that would be considered attractive (if not excessive given performance) by most in the private sector.

The issue is not so much that such high levels of dysfunction and failure exist but rather that it is allowed to continue and worsen. Why is this? It must be remembered that local government in SA is uniquely protected by the constitution as an equal autonomous sphere (not tier) requiring national and provincial co-operative governance and funding. But the lofty ideal of an independent local government intended to entrench the local democracy that was so sorely lacking in apartheid staffed and run by selfless community activists has floundered.

Instead the independence of the sphere has been exploited by local political factions rent-seekers and personal fiefdoms that overlap with regional political structures. Connected community members lobby for highly paid councillor positions.

In grindingly poor municipalities the lucky few are rewarded with bonanza salaries and perks of half-a-million rand or more otherwise unattainable in the communities they represent. Councillors’ posts are used as rewards in political structures controlling lucrative networks — with regional party structures the ultimate line of accountability not long-suffering constituencies.

Positions are doled out on the basis of allegiance to and seniority within local networks. Experience aptitude and dedication to public service are secondary; this ethos and organisational culture flows like poison through the administration itself where connected but ill-fitting personnel are inappropriately hired for specialised managerial financial or engineering roles. 

Provincial leaders may be influenced by the same political pressures that undermine a municipality; making them unwilling to confront local leaders (who can be their superiors in party structures) or intervene in even the worst cases of local failure.

This scenario also explains the lack of willingness to work with outside stakeholders who simply want to ensure service delivery. Consider Kgetlengrivier where community activists rehabilitated water services only to see it wrestled back by the North West province or the Eastern Cape government which defended resistance to dissolving failing Makana even after a  court order as “opening the floodgates” (for further action). Admission that others could motivate for such intervention is of course an appalling concession of failed provincial oversight.

The extent of mismanagement failure and collapse experienced today was never envisaged by those framing local government policy 25 years ago with the independence of local government that was enshrined now perversely acting to protect incompetence malfeasance and failure. The cynicism and sense of impunity of those in charge of the worst-run municipalities is challenged daily by rising service delivery protests legal action and disinvestment but not by political repercussions.

A protest an Eskom court order (in the face of billions owed and already collected for electricity) a business relocating or closing a media expose are typically met with arrogance blustering defensiveness or an indifferent shrug. And why not? Those accused or implicated in maladministration have often been shielded or as in the notorious case of Mathjabeng even promoted to MECs in 2004.