EDITORIAL: Rotten politics behind municipal meltdown

The country’s metros are being run into the ground with only one of eight — Cape Town — receiving a clean audit in the latest report released by auditor-general Tsakani Maluleke. 

Clean audits aside, the country and continent’s largest budget city, Johannesburg, failed to even provide quality financial statements at the outset of the audit, said Maluleke. Tshwane, Mangaung, Buffalo City and Nelson Mandela Bay all provided poor-quality financial statements. 

“The City of Joburg didn’t give us quality financial statements when we began our audit. Now that’s a big city, the biggest in the country, the biggest on the continent. There should be no difficulty in ensuring that you’ve got the skills and the capability to do what you’re supposed to do, just on compiling financial statements,” said Maluleke.

The eight metros account for half of the expenditure on local government nationally and provide services to 46% of households; they boast large budgets and are meant to be centres of economic activity, yet their finances are in a shocking state.

Then, there is doubt about whether two of the country’s metros, including the capital city, Tshwane, can continue as going concerns — so dire is the state of their finances. 

Tshwane and Mangaung (Bloemfontein) remain at risk for four years or more. 

Mangaung spent a whopping 81% of the revenue it received from customers, or rate-paying citizens, on employee-related costs amounting to R1.96bn, leaving little to be spent on service delivery, says the auditor-general’s report.

During the same period, the metro incurred R1.34bn in unauthorised spending and R122m in fruitless and wasteful expenditure. 

Here is the kicker. Mangaung was placed under national government intervention in 2019, with a financial recovery plan in place for more than a year, yet its finances have shown no improvement. 

Year after year, the auditor-general raises the alarm over the state of municipal finances, yet her warnings have consistently been ignored, culminating in only 41 of the country’s 257 municipalities receiving clean audit outcomes for the 2023/24 financial year. 

Business Day has been covering the auditor-general reports on municipal finances annually. Far from getting better, they deteriorate further and further, diminishing the shock factor behind the dire figures released by the office. It is unlikely that President Cyril Ramaphosa hasn’t expressed “shock” over her findings; he may yet do so when he and his party’s decline in support continues.

Maluleke’s findings should be read by every SA ratepayer as they provide hard evidence of the disdain with which the political class holds those they are meant to serve at the most basic level. There are no complex policy decisions here; the job of local government is to provide services and maintain the infrastructure required to keep doing so.

Municipalities are increasingly unable to deliver on the very basics due to poor financial controls, and the large, big budget cities collecting billions in rates from residents and businesses cannot (or wilfully do not) attract skilled professionals to put together quality financial statements. 

After the 2011 local government election, the ANC had mooted parachuting top national leaders into local government to sort out the mess there — at the time, the large-scale municipal collapse seen now was in its early stages. The initiative never materialised, and the rot at local government level deepened, accelerating dramatically as the era of municipal coalitions dawned in 2016. 

Two years ago, ANC secretary-general Fikile Mbalula again announced that top national leaders would be dispatched to municipalities to turn them around. 

Very little has changed since. 

Very little will change because municipalities have become employment agencies for the lower rung among the political elite, which national leaders dare not touch, as it is this group that keeps them in power at the top. 

Until this dire political reality shifts, citizens will remain on the periphery of a system designed not to deliver services, but to fatten political hyenas, from the bottom feeders to the top dogs.