ANC looks at struggling municipalities in 2019 manifesto

24 March 2019 - 13:41 By AMIL UMRAW
The ANC has admitted that its plan for development at a municipal level is not fiscally sustainable with the number of municipalities in financial distress increasing from 95 to 128 last year.
The ANC has admitted that its plan for development at a municipal level is not fiscally sustainable with the number of municipalities in financial distress increasing from 95 to 128 last year.
Image: Stephanie de Sakutin

The current development trajectory at local government is not delivering sufficient economic growth, social inclusion or spatial integration.

In a briefing document on the ANC's 2019 manifesto released on Sunday, the party admits that its plan for development at a municipal level is not fiscally sustainable, with a high degree of stress being placed on the local government financial system.

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The party blames this partly on the operating costs associated with infrastructure and the inability of municipalities to collect revenue.

In the last year, the number of municipalities in financial distress increased from 95 to 128. There are 64 municipalities with negative cash balances and 136 with cash coverage of less than one month.

A total of 113 municipalities adopted "unfunded budgets" for 2018-19 financial year.

"The inability of households to pay service charges, combined with the inability of municipalities to collect own revenues, has resulted in 115 municipalities reporting growth in debtors of more than 20%. This has had a knock-on effect on municipalities' ability to pay creditors, with over R21bn currently in arrears – including over R10.7bn owed to Eskom and over R5.5bn to water boards," the party says. 

The party believes there should be far stronger incentives within government to co-ordinate its programmes and that municipalities must be capacitated to play a greater role in rural and urban development.

It says that emphasis should change from direct provision of facilities towards the promotion of efficient local markets and demand-driven inclusive growth.

"This will mean rapidly and progressively shifting the focus of central government funding for development towards demand-side subsidies that support the agency of households and communities," it says.

In addressing these challenges, the ANC says it will, among others, consider migrating to a single-tier local government system and reform the ward committee system. It also outlined a number of procedures to address issues of accountability, infrastructure and economic transformation.


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