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Though this may not be ‘new’ news to most South Africans, a recent Ratings Afrika survey has shown that the “poor, and in some cases almost non-existent service delivery” is worse than most of us realise.

Despite the government’s failure to provide basic services, the survey pointed out that “It is incomprehensible that the government cannot see or acknowledge what is happening and start taking the necessary steps to save the country from disaster”.

The depressing survey found that the majority of municipalities are pretty much bankrupt due to gross financial mismanagement and poor governance. Tallied together, the 112 municipalities and metros measured by Ratings Afrika ran up a combined operating deficit of R27 billion in 2023.

Ratings Afrika’s Municipal Financial Sustainability Index (MFSI) measures financial sustainability on a score of zero to 100, based on six underlying components, namely operating performance, liquidity management, debt governance, budget practices, affordability, and infrastructure development.

Dissecting the state of our local governments on this criteria revealed that only a handful of municipalities performed ‘outstandingly’. Despite the election rhetoric being thrown at the DA, it probably needs to be noted that all of these municipalities are run by the party. The Ratings Afrika survey however does not mention this specifically.

The top-performing metro continues to be Cape Town, with a score of 70, well above the metro average of 43 and miles ahead of the worst-performing Mangaung at 27.

Midvaal, Mosselbay, Swellendam, Saldanha, and Swartland Municipalities are putting the rest of the country to shame with average scores of above 70. Mossel Bay Mayor Dirk Kotzé points out that the municipality’s population has grown roughly 50% since 2011, partly due to ‘semigration’, and in part to informal settlement growth.

Saldanha Bay Mayor André Truter says the town’s population has grown by a similar percentage over the same period, again due largely to semigration.

“We’re at the receiving end of failed national policies, which are left to local government to solve.”

The majority of municipalities are lacking in the kind of strong controls and budgetary practices that separate the good from the bad.

For many, their cash shortfalls are expected to worsen since most “will continue to realise losses, and revenue collection is expected to remain subdued because of the slow economic growth caused by the central government’s inability to implement free market economic policies that would stimulate economic activity in the private sector,” says Ratings Afrika.

Without funds, service delivery in most municipalities will continue to worsen. The coffin nail is driven even deeper when considering the Minister of Police’s revelation that the average response time of police in the Northern Cape is over an hour. This is not something that can be fixed with solar panels and a borehole.

Most of the decline can however be arrested if the taxpayers are able to be squeezed for a R85 billion bailout.

“Unless there is a concerted effort from the municipalities themselves, the provinces and national government to strengthen their governance and financial management this very bad situation will continue.”

“Service delivery will break down further, the quality of life for most residents will deteriorate, and economic activity will be stifled.”

South Africans might just manage to boot the current government out in the upcoming elections, but whoever takes over will be handed a poisoned chalice. Good luck to them, and us all.

[source:businesstech]