Astral’s plight is a striking example of poor governance at local government level. Picture: SUNDAY TIMES
Astral’s plight is a striking example of poor governance at local government level. Picture: SUNDAY TIMES

For a country in desperate need of private sector investments, you would think that local government officials would understand their role in the broader efforts to break SA out of its lowest low-growth trap since the 1940s.

You would be sadly wrong. Just ask Astral, SA’s largest poultry producer and the biggest employer in Standerton. 

Earlier this week, Astral took a R93m, or 10% of its operating profit, charge to its balance sheet, after scaling back output at its flagship factory in Standerton in Lekwa Municipality, Mpumalanga, because local government officials failed to upgrade water supply infrastructure.

The deteriorating water treatment infrastructure in Lekwa adds a cost burden on the company already battling high electricity prices and cheap chicken imports. Astral has been forced to install machines to extract water from the nearby Vaal river, which is hauled by truck to the factory. The truck makes 130 trips a day.   

Astral’s plight is a striking example of poor governance at local government level, where mostly amateur politicians are elected and incompetent municipal managers are appointed for reasons other than their views on macroeconomics.     

President Cyril Ramaphosa recognises the central role SA’s weak local government plays in slowing his broader efforts to revive the economy, which has hardly grown in the past 10 years. He knows that it dampens business confidence, which is at its lowest since the 1980s, and contributes to SA’s decade-high unemployment rate. 

In August, he launched Khawuleza, a sweeping overhaul of how all spheres of government deliver and evaluate services because, as Ramaphosa rightly pointed out, programmes and initiatives under way lacked a clear link to the government’s broader strategy.  

He wants all local government officials, including in Lekwa, to ensure that their budgets are in line with his administration’s priorities. Economic growth and putting millions of South Africans into jobs are top of that list. It is only when the economy is pumping, and companies such as Astral are running at full capacity, that we can reduce poverty and inequality.  

But we have been here before. In 2004, then-president Thabo Mbeki launched “Project Consolidate”, which was aimed at addressing the parlous state of local government institutions unable to deliver basic services such as water or empty rubbish bins, manage their budgets and build infrastructure.

When he resigned four years later, he had little to show for his efforts. A practical assessment of this sphere of government by Jacob Zuma’s administration came to the same conclusion.

Two other such initiatives have followed. Pravin Gordhan, who had an 18-month stint as minister of co-operative governance & traditional affairs in 2014 and 2015, sought to fix municipalities by getting back to basics. No prizes for guessing if it worked.  

Protests over the poor delivery of government services — running water, sanitation, paved roads and schools — are common in many black townships. In April, a critical mass of residents in Alexandra took to the streets to express grievances over poor services.  

Other protests erupted in Hammanskraal, Roodepoort and Khayelitsha. Think-tank Municipal IQ found that there were 140 such protests from January to May, on course to surpass 2018’s record of 237.

To be fair, among all levels of government, municipalities still have the fewest tools when it comes to dealing with everything from leaking sewerage to fixing water treatment facilities. About 20% of these units of government have qualified engineers to build big infrastructure projects.  

An auditor-general report on municipalities showed in 2018 only 13% of local government councils obtained clean audits, meaning they had complied with accounting rules and legislation, underlining the lack of financial professionals  running their budgets.

For many elected officials what Ramaphosa is demanding might not be what they bargained for when they decided to run for office. But it must done to ensure their local communities prosper, and by extension the entire country.      

It’s a daunting task but not an impossible one.