The recent unrest in parts of SA was one of the lowest points in its adolescent democracy. The appalling news was relayed across the globe and the brand image of the country has taken a knock. In addition to the unfortunate loss of lives and livelihoods, such an impactful event is expected to hit the economy hard and denigrate SA as an investment destination. The tremors of the unrest are expected to reverberate across multiple sectors in time to come.
A municipality’s fate is directly connected to the fate of the country and vice versa. Municipalities are among the few organs of the state that directly interact with the common citizens. Hence, they will also be the first to feel the effects of such events and brace for impact on multiple fronts.
One of the primary priorities of a municipality is to nurture and retain its large consumer groups (LCGs), primarily businesses and industries within its geographical limits. This is because the LCGs bring in the lion’s share of municipal revenues and consume the majority of services. Often, there are residents of the municipality who are directly or indirectly dependent on these LCGs for their livelihoods. The unrest will profoundly impact some of these customers due to direct impact (such as properties burnt or looted) or indirect impact (such as interruptions in the production value chain). These customers will potentially fail to meet their current and historical debt obligations to the municipality.
In addition to retention, a municipality is mandated to attract new businesses. Unrest pours cold water on the potential plans of a municipality to attract investors and thus future revenues. Who will invest in a place where the security situation is poor? Who will invest in a country or section thereof where the safety of personnel and equipment cannot be guaranteed?
The ripple effects will also be felt in complimentary sectors, such as the tourism industry, which is already reeling because of the impact of Covid-19. The unrest has created a double negative which will further alienate potential tourists.
Not least, it will accelerate the migration of skills out of the country and further strain the labour force and associated skill sets.
It does seem all is lost, especially with business and investor confidence at new lows.
Nelson Mandela once famously said: “Do not judge me by my successes, judge me by how many times I fell down and got back up again.” As a nation, municipality and community, there is no better time to imbibe this psyche and turn one of the worst crises into the finest opportunity.
Unity is the call for the day, and a collective effort based on the pillar of customer centricity and premised upon public-private partnerships the order of the day. Moreover, municipality as the customer-facing arm of the government is the pivotal player in realising this opportunity.
First, municipalities need to ring fence their LCG customers and establish dedicated task teams with a primary focus on customers affected directly by the unrest, closely followed by customers indirectly impacted in the order of severity. Municipalities should focus on getting LCGs impacted by the unrest to survive and salvage parts of the businesses which can be sustained. The intention is to get these businesses to survive so their operations can be restored to health, with better cash flow positions to meet the obligations of employees and suppliers of services, such as the municipality.
Overall, the municipality should design a relief programme or package which can get the affected LCGs back to health. The relevant departments and other organs of the state should also be included in the programme to reduce red tape and achieve integrated service delivery. By-laws and policy decisions need to be adopted where applicable.
Unconditional support needs to be provided by the municipality to restart operations of affected businesses. Where properties have been rendered unusable, municipalities may consider leasing out municipal properties and assets with associated rental breaks and incentives. Moreover, their debts may need to be restructured and interest put on hold where applicable. At least a year of rates payment breaks and holds on tariff increases should be considered for the most severely affected LCGs. Furthermore, the municipality should consider roping in the services of its other facets, such as outdoor advertising, and provide free advertising space for products or services of the affected LCGs.
Overall, the municipality should design a relief programme or package which can get the affected LCGs back to health. The relevant departments and other organs of the state should also be included in the programme to reduce red tape and achieve integrated service delivery. Bylaws and policy decisions need to be adopted where applicable.
Further, municipalities and LCGs have been presumed to work in silos and it is important for both to visibly join the collective. Public-private partnership projects should be initiated and implemented in a time-bound manner. These projects should also give importance to training and development to improve employment prospects, especially for the youth.
This might also be an opportune time to relook at the prospect of special economic zones (SEZs), which can provide improved security and safety, among other benefits. Excessive government/municipal control was one of the key reasons SEZs, a successful concept overseas, were not fully successful in SA. This may be an apt opportunity to reintroduce SEZs to a public-private partnership framework so both parties can cover the limitations of each other and reap mutual benefits.
Further, municipalities should improve and better equip the security apparatus under their purview. Improved visibility of security through successful examples, such as CCTV rollouts, is a confidence booster for LCGs.
Lastly, municipalities should consider introducing community-based projects for revenue-protection activities where whistle-blower communities are rewarded considerably for reporting illegal connections and other activities, thereby indirectly supporting the communities through a reward system.
Time is key and municipalities have been long accused of sluggish pace, not without reason. Hence it is vital to action these in a time-bound manner. As Mandela said: “We must use time wisely and forever realise that the time is always ripe to do right.”
In summary, the unrest has presented a fine opportunity for municipalities to set up the aforementioned task force for all LCGs, with focus on affected ones at the start and a gradual transition to a one-stop contact centre for all LCG services. In the meantime, municipalities needs to think out of the box to introduce public-private projects which stimulate the local and national economy. SEZs need to be investigated more closely as potential confidence boosters to public-private partnership initiatives. Simultaneously, municipalities need to work on improving their security apparatus and monitoring mechanisms.
It is apt to conclude with another of Mandela’s famous quotes: “Everyone can rise above their circumstances and achieve success if they are dedicated to and passionate about what they do. When people are determined they can overcome anything.”
It is imperative the nation assimilates this into its psyche and rises above the perceived ashes.
* Empril Mathew is Associate Partner at Ntiyiso Revenue Consulting
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