NWU Business School Think Tank on local government

The Business School of the North-West University (NWU) held its fourth digital Think Tank on the state of local government in South Africa, with the focus on the section 139 interventions in local government.

Four presenters were invited to participate and a lively discussion took place afterwards. Ben Bole, a PhD student at the NWU, made a presentation on the nature of section 139 interventions. Ben Deysel from the Harrismith Business Forum made a presentation about the collapse of the Maluti-A-Phofung Municipality and the role of the local business community.

China Duduvo from the NCOP and chairperson of the Select Committee on COGTA in Parliament, took a critical look at the current state of local government, and Andy Crocker from Astral explained the developments in the Lekwa Municipality (Standerton) in terms of electricity and water supply.

The Think Tank took place under the moderatorship of Desmond Phuti, with Theo Venter as his assistant.

The following issues were discussed among participants during the think tank:

• Four issues have exacerbated the problems at local government level in South Africa, namely an economy in recession, COVID-19 and COVID-19 corruption allegations, service delivery protests and community frustrations, and the forthcoming local government elections in 2021.
• The application of section 139 of the Constitution seems to be political in most cases, and it is applied selectively.
• Very few cases of successful administration can be listed, but several municipalities are under administration for the fourth or fifth time.
• Out of 257 local governments, 46 are currently under administration, of which 14 are in North West.
• The current debt of the Maluti-A-Phufong Municipality stands at R5.3 billion and it is growing monthly. Monthly electricity usage amounts to R80 million, and income is currently at R25 million.
• The Harrismith Business Forum has applied for a certificate to disband the Maluti-A-Phofung municipal council.
• Eskom has seized the bank account of the Maluti-A-Phofung Municipality and raw sewerage daily spills into the Wilge River, which flows into the Vaal Dam.
• Astral obtained court orders in 2017 and 2019 to prevent Eskom from cutting the electricity supply to the Lekwa Municipality. In the case of Astral Foods, 2 590 jobs are directly involved.
• Astral also invested R50 million in a reverse osmosis plant that, in conjunction with its existing state-of-the-art wetland system, has reduced the company’s dependence on primary water by 44% by treating the waste water from the factory. Although this is a sustainability success story in its own right, it remains inherently problematic that the town’s revenue stream from one of its few paying customers has once again been reduced. This raises concerns about the longer-term supply of water to the broader Standerton community water purification project.
• Local government is a very complicated level of government and is experiencing huge capacity problems.
• National and provincial governments have an obligation to monitor and oversee the functioning of municipalities, but have failed to do so. An example of the failure by the Free State provincial government is the ability of Maluti-A-Phofung to have developed a debt of R5.3 billion.
• There seems to be a lack of co-operation between municipalities and the local business communities.
• Some municipalities have deteriorated since the section 139 interventions and the calibre of administrators is often highly doubtful. Some failed municipal managers are often deployed as administrators.
• No effective provincial early warning systems are in place to prevent financial failure in local governments.
• Provincial departments are ill-equipped to oversee local government problems.
• Most interventions are reactive rather that proactive.
• There is no adequate resource allocation for the implementation of interventions, and the administrators are failing due to lack of support and co-operation.

The Think Tank ended with the following suggestions about the future of local government:

• Interventions in terms of section 139 should be very specific and should be solution-driven.
• China Duduvo said consequence management should be implemented without hesitation. Some councillors and municipalities feel they are politically protected and refuse co-operation.
• Monitoring and oversight should be strengthened at provincial level.
• Capacity must be improved at local government level by working with all stakeholders.
• Working with local businesses at municipal level is an absolute necessity.
• Local government is fixable, but then all the stakeholders must play a role, including local businesses and the community in general.
• The district development model must be given a chance as part of the solution for local government, but proper research must be conducted.
• According to Darkey Africa, Chairperson of the North West Planning Commission, what is needed is capacity, capacity and the appropriate skill set.

Enquiries: Theo Venter, [email protected], 082 415 9034