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A relook at the evolution of the South African Local Government: Challenges and Prospects

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Picture: GCIS – The challenges of inadequate management, skills gaps, and flawed budgeting within the South African municipalities have been well documented and articulated by SALGA.

By Bheke Stofile

As we reflect on the transformative journey embarked upon since the 1998 White Paper on Local Government, it becomes evident that the assumptions made back then have collided with a stark reality.

Envisioned as a framework where municipalities would predominantly generate over 80% of the revenue from fees for service provision and property rates. For that to be realized was through surplus generated from trading services (waste management, electricity, water and sanitation), a principle of buy and sell to generate municipal income, as well as funding transfers from the national government.

While a new environment is emerging within the developments around plans to reform the Electricity distribution sector, the emergency of Independent Power Producers (IPPs), and plans for water reticulation to be placed in the hands of a third role player, whatever the merits, the question remains what will be left of our municipalities. Should they remain spectators in the theatre of serious erosion of their municipal income?

At present, the state of local government remains precarious on many fronts, exacerbated by low economic activity and the erosion of municipal revenue which has caused many municipalities to be in financial distress. New governance systems to address instability caused by coalition arrangements are required urgently while also municipal authorities need to be agile to ensure that their financial autonomy remains intact and greater jurisdiction over revenue is adaptive to the prevailing political and economic environment.

The stark reality is that the shifting economic landscape and inherent budget limitations have left too many of our municipalities, including metros, grappling to maintain balance in their books.

SALGA has organized various shakers and movers in the country’s economic cycle, including former SALGA leaders to partake in broader discussions on the future of local government in South Africa.

The National Members Assembly (NMA) convened by the South African Local Government Association (SALGA), September 5-6, 2023, in Ekurhuleni takes place at a significant period in the history of local government.

Aptly themed: “25 Years since the advent of the 1998 White Paper on Local Government: Are we on course and driven in Building a Sustainable, Responsive People-Centred Local Government,” the assembly will gather the most influential stakeholders under one roof to answer these important questions. What kind of local government do we want?

We expect all the dignitaries, international guests, and representatives from all tiers of government, including Cabinet Ministers, Municipal Leadership, and various key officials from the 257 municipalities across the country, to help us chart a new trajectory of local government. It is they who must write the new history of local government.

Notwithstanding, the assembly will serve as a platform for municipalities to share best practices, innovation, and many ideas to invigorate the sector. In the mist of gloom and doom, the good stories in local government tend to be overshadowed, so we need to elevate those doing great to inspire the rest of us.

The stark reality is that an alarming revelation indicates that a staggering 163 out of 257 municipalities grapple with dysfunctionality and distress due to a multitude of reasons – poor governance, administrative inefficiencies, financial mismanagement, and poor service delivery.

We must ensure that we use the legislative and other measures to ensure the national government and provincial governments, as required by the Constitution, support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and to perform their functions.

As we stand at this juncture, the question posed by the assembly theme resonates profoundly: Have we charted the course envisioned in building a sustainable, responsive, and people-centered local government? A question has been asked; How long can we criticize the assumption of the White Paper when we must shape it to adequately respond to the current state of local government?

The challenges of inadequate management, skills gaps, and flawed budgeting within the South African municipalities have been well documented and articulated by SALGA.

The 1998 White Paper on Local Government, aptly likened by then Minister Valli Moosa to a “mini- constitution” for local governance, articulated the transformational blueprint for the country’s local government framework. With the establishment of municipalities spanning the nation, the devolution of powers and functions was set in motion. Fast-forward two and a half decades, and a stark reality unveils itself – the revenue struggles that many municipalities face are undeniable.

As tensions escalate concerning municipal tariffs, the initial assumption of revenue generation through service charges and property assessments now raises eyebrows.

At the SALGA national assembly, the deliberations will centre around a pivotal inquiry: Is the local government, tasked with delivering crucial services, falling short of its primary duty? Moreover, to what extent can the shortcomings be attributed to the inherent flaws within the White Paper on Local Government?

Amid these debates, the eThekwini Ratepayers Movement’s ongoing refusal to pay rates amid a dispute underscores the complexity of maintaining essential services. While urban centres have successfully harnessed income from service charges and property rates, smaller rural municipalities primarily rely on grants and subsidies. It is imperative to recognize that the intricate systems that ensure our daily services are often taken for granted.

A critical portion of revenue stems from electricity sales, constituting a substantial fraction of municipal income. However, with the cloud of load shedding engulfing the nation, the revenue stream is facing swift erosion. Mzi Khumalo, Gauteng MEC for Cogta, highlighted the pressing need for municipalities to diversify their income beyond electricity, hinting at a re-evaluation of certain assumptions embedded in the White Paper.

A vexing issue of Section 139 interventions is another elephant in the room. Interventions in municipalities are meant to assist municipalities and not drown them. In Parliament, and elsewhere, SALGA has warned about the potential abuse of such interventions for political motives rather than genuine service improvement warrants our attention.

While the Constitution mandates Provincial governments to intervene, when municipalities falter in fulfilling their mandate, instances have arisen where intervention exacerbates existing problems. This cycle must be brought to an end, ensuring that interventions are guided by a sincere commitment to fostering progress and the well-being of the people they are meant to serve.

The forthcoming SALGA assembly holds paramount importance in shaping the future trajectory of local governance in South Africa. This assembly, serving as SALGA’s highest decision-making platform between National Conferences, will delve into various crucial matters that will culminate into a comprehensive plan of action for the sector and adoption of positions on local governance systems, policies, and legislative matters, which collectively hold the key to the sector’s evolution.

We stand at the crossroads of reflection and anticipation. South Africans should dare not lose hope.

With the legacy of the White Paper as our foundation, the time is ripe for a collective re-evaluation and a renewed commitment to charting a path toward a brighter future for local governance in South Africa.

*Bheke Stofile is the President of SALGA.