Finance minister Enoch Godongwana has warned that continuous budget cuts have created service delivery challenges for municipalities that have left dozens in a critical condition.
The minister told delegates at the 2022 Local Government Summit, held at the Birchwood Conference Centre in Boksburg on Tuesday, that 43 municipalities are in the “intensive care unit” and 175 municipalities have unfunded budgets.
“The starting point in financial management is when [council] sits and decides to approve an unfunded budget. When you approve an unfunded budget, you’ve made a decision that you’re going to spend money you don’t have,” he said.
Godongwana said this results in poor service delivery, which the government can ill afford.
Discussing the issues facing local government, he said budget cuts were a major issue leading to a shift of functions to local government.
He said governance was worsened by a lack of understanding between political offices and the administration.
“That distinction sometimes is blurred. In effect it undermines governance in municipalities. What is the effect of that? Government failure and financial crisis.”
Godongwana called for a discussion on political administration interface, which he said had an effect on financial management.
Cooperative governance and traditional affairs minister Nkosazana Dlamini-Zuma said undeveloped councils would continue to struggle unless they are given critical economic and infrastructure improvements.
She told delegates leaving these councils underdeveloped would leave more urbanised municipalities and metros chasing “moving targets”.
“If the other districts are not developed, if they don’t have a vibrant economy, the metros will always be chasing a moving target — not only because of the natural growth of the population but because people are leaving their areas, not out of choice but out of desperation,” she said.
“The migration we are seeing, metros don’t know what to plan for. They don’t know who will be there in January. Let’s have a balanced look at development.”
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