Member’s Statement: Eastern Cape Municipalities hit rock-bottom

Issued by Vicky Knoetze, MPL
Shadow MEC for COGTA

The Auditor General’s Report was especially damning for municipalities in the Eastern Cape – it showcases the deteriorating state of local government in the province – if you ever wondered what rock-bottom looks like – this is it!

  • 83% of municipalities are facing significant cash-flow restraints.
  • 38% of municipalities’ expenses exceed their revenue.
  • 24 municipalities are unable to pay their creditors.
  • Only 1 municipality received a clean audit.
  • 15 municipalities received unqualified audits findings
  • 13 municipalities received qualified audits with findings
  • A staggering 8 municipalities received disclaimers.
  • Accumulated irregular expenditure stands at over R 11 billion, (R2.5 billion for the last financial year).
  • A total of 69% of municipal debt in the Eastern Cape is irrecoverable.
  • A lack of accountability resulted in the regression of 13 municipalities.

The result is that municipalities are failing to respond to the needs of the people. As infrastructure and basic service delivery continues to deteriorate.

Local government is the bedrock of economy, when local government fails, everyone suffers, as the collapse of governance will inevitably translate into essential infrastructure failures, sewerage leaks, water leaks and power cuts, business will struggle to operate, healthcare services will collapse and schools will struggle – livelihoods will be threatened – and it will affect every single person in the province.

It doesn’t get any worse than this – the silver lining is – it can get better IF we act now. The Democratic Alliance calls on the Premier and the MECs of COGTA together with Provincial Treasury to formulate a special task team for the evaluation of distressed municipalities in the Eastern Cape with a specific focus on:

  • The filling key vacancies to create stability.
  • Action audit outcomes.
  • Fostering a culture of zero-tolerance for non-compliance.
  • Increasing the capacity of municipalities to handle their own financial affairs.
  • Consequence management for transgression of legislative prescripts.

In the effort to address poor financial management in Eastern Cape municipalities.

Also read: AG Report casts spotlight on EC local government failings