Urgent intervention needed to prevent complete collapse of Eastern Cape municipalities

Issued by Vicky Knoetze, MPL
Shadow MEC for COGTA

Municipalities across the Eastern Cape are in crisis. People across the province are waking up to piles of uncollected rubbish, dry taps, no electricity and deteriorating municipal infrastructure, as the consequences of years of poor governance and lack of proper financial management have begun to manifest.

Municipal workers and service providers are going unpaid and service delivery has all but ground to a standstill as municipal coffers run dry.

In response to a parliamentary question, MEC of Cooperative Governance and Traditional Affairs, Xolile Nqatha, confirmed that 14 municipalities across the province have been identified by the Department as being in a state of ‘distress’.

SEE: IQP 2 Q 5

MEC Nqatha also confirmed that he had approached National Government for funds in February this year to bailout these unsustainable, bankrupt municipalities. This is a shocking indictment on the impact that the ANC government has had on the province.

The impact of poor governance is clear. The latest available audit figures show that 13 Eastern Cape municipalities have regressed in terms of audit outcomes for the 2019/20 financial year.

Of concern though, is that only five of these 13 municipalities are on COGTA’s list of municipalities in distress.

Eight municipalities are not on the list, including Sakhisizwe Local Municipality, which recently could not pay their staff, and Sunday’s River Valley Municipality, which has been without water for over a week, as Eskom cut electricity to their pumping stations due to non-payment.

The Democratic Alliance (DA) believes that COGTA’s list is a gross underestimate of the problem, and that the number of distressed and unsustainable municipalities is in fact much higher.

This will become even more apparent in the coming months, when the economic impacts of the Covid-19 pandemic, and subsequent enforced lockdown, begin to impact on municipal revenue streams. There has already been a dramatic increase in the level of under-collection on rates across the province.

I have written to MEC Nqatha to request a re-estimation of distressed municipalities in the province, including an evaluation of factors such as administrative capacity, vacancy rate of key positions, the ability of servicing debt to Eskom, and adverse audit outcomes.

Having an accurate reflection of which municipalities are in distress, and for what reasons, will assist the Department to determine a strategy for assistance and intervention.

SEE letter

Previous attempts by the Provincial Government to amalgamate unviable municipalities with well performing municipalities, has been a catastrophe. All the amalgamated municipalities are on COGTAs list.

The DA believes that these municipalities must rather be dissolved in terms of Section 139 of the Constitution.

Local government is the bedrock of economy, and urgent intervention needs to take place. This cannot be limited to financial bailouts, but rather direct interventions and support is needed to ensure that good governance is restored.