The true horror story of the collapse of local government in the Eastern Cape has been brought home by the latest Municipal Financial Sustainability Index (MFSI) report by Ratings Afrika. The report shows that the Amahlati municipality is one of the worst performing municipalities in the country.
This report follows the Auditor Generals report last month, which showed that 13 Eastern Cape municipalities reports have worsened compared to the previous year.
Local municipalities in the Eastern Cape are on the verge of total collapse. Service delivery is deteriorating rapidly, and the effects are disastrous for the quality of life of South Africans and for economic activity at local government level.
Corruption, cadre deployment and maladministration have crippled governance in the Eastern Cape.
The Ratings Afrika Report shows that there has been significant regression of the Eastern Cape’s financial sustainability score over the past five years, dropping from 34/100 in 2015 to just 29/100 in 2019.
The only provinces that performed worse than the EC is the Free State with 21/100 and the North West province with 25/100, the National average is standing at a mere 37/100.
Financial sustainability refers to the financial ability of local municipalities to deliver, develop and maintain services to residents. The level and quality of service delivery, as the primary governance role underpinned by financial sustainability, directly affects the quality of life of the people within a municipality.
The Democratic Alliance- run Western Cape is the top performer in the Ratings Afrika report, with a financial sustainability score of 59/100, and is the only province that has showed continuous improvement over the last five years.
The report states that the Western Cape is the only province where ‘governance practices are considered to be sound’.
Not surprisingly, the top three performing municipalities are also in the Western Cape, namely, Mosselbay Municipality, Saldanah Municipality and Malemesbury Municipality, all scoring above 70/100.
In stark contrast, the highest scoring municipality in the EC was Senqu Municipality – also the only municipality that achieved a clean audit – at 57/100
A further indicator looks at the collection rate of municipalities against the National Treasury benchmark of a 95% target.
The Western Cape has an average collection rate of 94%; the Eastern Cape achieved an average of 84.5%. This glaring difference is indicative of governance under the DA in the Western Cape, and the results speak for itself.
Local government in the Eastern Cape is in serious need of a complete overhaul. As early as February last year, 14 municipalities were identified as being in severe financial distress, with the position deteriorating daily, if the latest audit outcomes are anything to go by.
I will be following up with MEC of COGTA, Xolile Nqatha, to request s progress update on the re-determination of the municipalities in distress in the Eastern Cape.
The province needs a renewed focus on: well established financial policies; budgets based on sound-long-term strategies; improved revenue collection; strict compliance to Supply Management Processes and very importantly; a zero-tolerance approach to corruption and maladministration with severe consequence management process at local government level.