At times last week I felt that Grahamstown along with the Eastern Cape was about to be washed into the sea. I bought a pair of waterproof boots and jacket. By the end of the week my spirits were dampened, much like the national mood.
At times last week I felt that Grahamstown along with the Eastern Cape was about to be washed into the sea. I bought a pair of waterproof boots and jacket. By the end of the week my spirits were dampened, much like the national mood.
That national mood was clearly in the mind of Finance Minister Pravin Gordhan when he stood up to present the mini-Budget last Thursday.
Gordhan had to point out, to placate investors, that South Africa is not on the brink of disaster but also acknowledge the truth of recent events that highlighted underlying problems. He summed up the underlying problems nicely: inequality and unemployment, a failure of service delivery in some communities, and a faltering of local governance.
Events of recent months that had underscored those problems were a crisis of labour relations in mining, leading to the Marikana shooting, and what Gordhan tactfully called “mismanagement of supplies to schools and hospitals in some provinces”. To this, he added what he dubbed the “inappropriate” downgrading of South Africa’s sovereign credit ranking by two credit agencies, which increases the cost of our public debt.
Gordhan promised that government was confronting problems – including repairing “dysfunctional municipalities”.
This for me was welcome surprise: while much of the news focus was on bigger issues, development at the municipal level was a key theme of the mini-Budget.
Good news for Makana, for instance, was that more money would be devoted to rural municipalities for delivery of water, sanitation and electricity. Provincial governments would be expected to speed up providing agricultural services in these municipalities.
Gordhan acknowledged in the mini-budget the vital role cities and towns play in economic growth. The emphasis given to big infrastructure projects in the State of the Nation Address and the February Budget, could have been seen as confirming a national bias ¬– to the detriment of the role played by cities and towns and rural areas.
In his mini-budget, however, the Finance Minister announced that “urban municipalities” would take over low-cost housing and public transport, a big shift in responsibility and a challenge that cities will have rise to meet. He also said rural areas would get greater technical support. There will be more money for electrification, and for projects to improve infrastructure maintenance and stem leakages of water and electricity, all good news for places like Grahamstown.
Part of the problem has been management, particularly of infrastructure projects, and Gordhan said that cash payments would be tied to actual delivery of projects.
Help is on the way for our municipalities, is the message of the mini-Budget – a message that must be seen in the context of Gordhan’s harsh comments earlier this month about the state of municipal management.
It seemed somehow apt that he was speaking at Emperor's Palace, in Gauteng, when he told the annual conference of the Institute of Municipal Finance Officers that so familiar were the challenges of local government that we had all become “shockproof” to them. A lack of money was not the problem, because there were high levels of underspending, R10 billion in the last financial year. I have highlighted in previous columns the problem of underspending on infrastructure in Makana.
He lambasted municipalities for “poor planning, poor leadership, poor implementation, not hiring the right people and not having the right determination to ensure that the services we are supposed to provide and investments we are supposed to make are actually being made”.
He also complained that the municipal finance managers had not seen to it that debts were collected. Municipalities were owed R77bn, and he laid the blame at the door of inaccurate municipal invoices and inadequate billing systems. Again, Makana was in March owed around R210m in rates and services.
Gordhan pointed out municipalities were failing in their financial reporting, and tied to this unauthorised, irregular, fruitless and wasteful expenditure had increased by billions of rand.
Councillors were not let off the hook, and Gordhan said they must take a fair share of the blame for some of the fraud, corruption and interference with tender processes. “Councillors cannot hide behind ignorance of what is required of them.”
One of the things that the Marikana tragedy has brought to light is the end of the hostel system has not led to better miners’ housing. In his speech at Emperor’s Palace, Gordhan also pointed out that municipalities in mining areas had failed to see to it mine workers lived in decent conditions.
It’s a welcome sign that Treasury is now cracking the whip on local government. A call in Gordhan’s mini-Budget speech that didn’t get enough attention was the need for all of us to get involved in tackling our problems. As citizens, we can do this by holding government, including local government, to account through our elected representatives.
