Debts, coalition municipalities, and financial issues—KZN CoGTA’s budget speech

Estimated reading time: 5 minutes

The KwaZulu-Natal Cooperative Governance and Traditional Affairs (CoGTA) MEC Sipho Hlomuka took centre stage on Tuesday, 10 May 2022, to deliver the 2022/2023 Budget Speech – Vote 11.

However, while looking at a series of upcoming existing projects, Hlomuka did not shy away from issues within the province. He further highlighted steps taken to address the said issues within local municipalities across KZN. This included additional support to municipalities under administration.

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“We are pleased that the majority of municipalities under Section 139 intervention have achieved an acceptable level of political and administrative stability. Two notable exceptions are Mtubatuba and uMkhanyakude district, where we have intensified our support, including through the deployment of additional experts in the fields of governance, finance and infrastructure development. In addition, monthly meetings have been held with the ministerial representatives, senior municipal officials and our own business units to monitor progress and provide assistance and guidance where required.”

Additional finance experts have also been deployed in MsunduziMpofanauThukela districtInkosi Langalibalele Municipality (Estcourt)uMzinyathi District Municipality and Abaqulusi (Vryheid) Municipality.

Other municipalities that are not necessary under intervention have benefitted from this support. They are Ugu District, Amajuba District, as well as Nquthu and Alfred Duma (Ladysmith) municipalities.

According to Hlomuka, the purpose of these deployments is to support these municipalities in order to improve their financial management and reporting, and ultimately their audit outcomes.

“We have tabled a comprehensive assessment report in the Provincial Executive Council to enable the Executive to pronounce on the future of these interventions,” stated Hlomuka.

He further highlighted that CoGTA promoted the implementation of consequence management in municipalities.

 “We continue to monitor the implementation of consequence management in relation to senior management in municipalities with vigour. To this end, we have compiled monthly consequence management monitoring reports in relation to all municipalities in KZN, including those under administration.”

There are currently four municipalities with pending disciplinary proceedings against senior managers. Councils are being requested to fast-track and finalise these proceedings within the shortest timeframe.

During 2021/2022, KZN CoGTA tabled a total of six forensic reports in terms of Section 106 of the Municipal Systems Act at municipalities, namely Msunduzi (two reports), uThukela district, Alfred Duma, Abaqulusi, and Richmond.

“We have also monitored the implementation of recommendations of all other forensic reports tabled to date. Out of 750 recommendations, a total of 316 have been implemented to date as a result of this exercise. A database on progress made in the implementation of recommendations has been updated on a monthly basis,” added Hlomuka.

While looking at improving the running of municipalities in KZN, the MEC also discussed the staggering sums of monies that were owed to Eskom by numerous municipalities.

While eDumbe, Mthonjaneni, Abaqulusi and Inkosi Langalibalele local municipalities were able to settle their debts, MEC Hlomuka highlighted that there are still a number of municipalities that owe Eskom.

“These arrears have been exacerbated by the low revenue collection on service charges due to the Covid-19 pandemic. Currently, there are five KZN municipalities in arrears with Eskom payments totalling R675.1-million.”

Arising from mediation efforts and support in developing credible payment plans, including introducing cost containment at these municipalities, four municipalities have reduced their debt. They are:

  • Ulundi owes Eskom R99.2-million from the original debt of R105.3-million.
  • Newcastle owes the power utility R137.8-million from the original debt of R264.8-million.
  • Msunduzi now owes R189.4-million from the original debt of R199.9-million.
  • Endumeni (Dundee) owes Eskom R36.2-million from the original debt of R54.2-million.
  • Mpofana municipality, in contrast, now owes Eskom R293.5-million which is an increase of R50.9-million from the previous year.
Furthermore, Hlomuka highlighted that KZN CoGTA is dealing with challenges in coalition municipalities.

“There is no doubt that the 2021 Local Government Elections resulted in the continuation of political realignment in the province. This is characterised by the dramatic increase in the number of hung municipalities from fewer than 10 to more than 20.”

Moreover, he explained that there is anecdotal evidence of cases where service delivery has been impacted by ructions among coalition partners.

MEC Hlomuka stated that municipalities, such as Mtubatuba, Newcastle and uMvoti, are some of the examples where CoGTA have already begun to see these ructions. Their impact on service delivery, according to the MEC, is undeniable. 

“Squabbles between and among political parties diminish the public confidence in their ability to govern effectively. We urge political parties to do all in their power to prevent such ructions. Working with our partners such as SALGA, we will be setting up conflict management mechanisms to ensure that coalition municipalities are stable,” he said.

While he enthused that there was no doubt that coalitions would remain an important aspect of local government going forward, the MEC said that the Minister of COGTA will be approached to consider augmenting policy and legislation to cater for the stability of coalition municipalities in future.

On top of this, the MEC also discussed the Amajuba and uMzinyathi District Disaster Management Centres.

The MEC pointed out, “Even as we continue to support each and every disaster management structure in the province, the District Management Centres at Amajuba and uMzinyathi district will in 2022/2023 receive special attention in order to bring them up to the standard of other District Management Centres in KZN.”

According to the MEC, KZN CoGTA will work closely with both districts to ensure that these two centres are adequately equipped to fulfil their critical mandate. Additional funding to the tune of R5-million for each centre will be allocated in 2022/2023.

With this in mind, what are your thoughts on the above-mentioned? Share your views in the comment section below.

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2 thoughts on “Debts, coalition municipalities, and financial issues—KZN CoGTA’s budget speech

  1. About Newcastle and ructions, he’s talking absolute nonsense and wants to create the impression that the ANC was stable. What has been inherited is a right royal mess!

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