Bankrupt municipalities, the cause of poor service delivery

By James Masango MPL – DA Provincial Leader: Mpumalanga

Date: 01 September 2017
Release: Immediate
Type: Op-Ed

Poor financial management in municipalities is the leading cause behind the numerous service delivery protests that have plagued Mpumalanga. At least 10 local municipalities are operating at a Liquidity Ratio of under 1 (one) – which means that they are unable to settle their current and short term obligations. Effectively, this means that under this ANC-led government, more than half of Mpumalanga municipalities are bankrupt.

Over the years, it has become pretty clear to the people of Mpumalanga that this ANC-led government cannot deliver services, how can they when they cannot generate or collect any revenue due to a failure of financial systems. Lekwa, Thaba Chweu, Msukaligwa, Dipaleseng, Mkhondo, Emakhazeni, Govan Mbeki, Nkomazi, Chief Albert Luthuli, and Dr. J.S Moroka local municipalities are some of the most bankrupt municipalities where residents are forced to live without dependable services because the municipalities just can’t afford to deliver. Ironically, it is especially in these bankrupt municipalities that corruption is most rife and the politically connected few continue to live in the lap of luxury while the people have nothing.

By 31 March 2017 Mpumalanga municipalities had a debt of R8.6 billion of which R5 billion (85%) was contributed by households. This is according to the Section 71 report as required by the Municipal Finance Management Act (MFMA). In addition, the failure to generate an income by these municipalities resulted in R4 billion being owed to entities such as Eskom. As at 31 March, R2.1 billion was owed for bulk electricity purchases while R990 million was owed for bulk water purchases.

The failure to implement revenue improvement plans resulted in Lekwa and Dipaleseng local municipalities collecting less than 60% of the revenue needed to deliver services. Lekwa collected 45% while Dipaleseng only collected 32% of its debt. Year on year, the Auditor-General appeals to these municipalities to tighten their financial controls, to curb wasteful and irregular expenditure and to address financial mismanagement but it all falls on deaf ears.

The DA now governs for almost 16 million people across the country, in some form or another. The manner in which we govern will have a significant impact on the lives of these people and, ultimately, the lives of all South Africans. One thing is certain, where the DA governs, life is better.
It is not enough for the ANC to simply come up with policies and then think that the work is done. The real work of governing comes in the implementation of these policies, in the tightening of controls, in accountability and in rooting out corruption.

As long as Mpumalanga municipalities remain broke, the province will remain at a standstill. Unemployment will remain high and the cycle of poverty will continue to rob young people of their dreams and aspirations. It is time to usher in a new kind of thinking in Mpumalanga. It is time to consider a province that is not filled with corruption, and municipalities that function for the people. It is time that the people of Mpumalanga made plans for a life after the ANC because as the ANC continues to weaken, the chances of prosperity in Mpumalanga grow.

The ANC may still see Mpumalanga as its last frontier but it is inevitable that change is coming. The people of Mpumalanga deserve a government that cares and one that is capable of delivering. This is the government that the DA will bring.

Media Enquiries

James Masango MPL
DA Provincial Leader: Mpumalanga
082 891 0717

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