There is a slight increase in the number of financially stable municipalities in the country, according to Cooperative Governance Minister Nkosazana Dlamini-Zuma.
Dlamini-Zuma and the acting Treasury director-general Ismail Momoniat were briefing the National Council of Provinces on measures to mitigate fiscal leakages and their impact on service delivery.
Dlamini-Zuma said out of the country’s 278 municipalities, only 30 are considered stable.
“The number of stable municipalities has increased. Not a lot, but from 16 to 30 in the previous year. And that improvement has been recorded mainly from KwaZulu-Natal which has seen 10 more municipalities that have been stable. I won’t waste time mentioning which they are,” she said.
According to the minister, fiscal leakages are mostly caused by ineffective governance structures and leadership, inappropriate political administrative interface, and poor financial management.
She said the limited involvement of communities in the planning, implementation and protection of assets has caused further leakages, further noting that this has had a bad impact in the delivery of important services such as water, sanitation and energy.
Dlamini-Zuma said the biggest contributor to these leakages is the non-payment of rates, noting that over R120-billion is owed by taxpayers. The minister said fiscal leakages also affect rural arears the most because they lack the right quantity and kinds of technical capacity.
“The biggest part of this has been a culture of non-payment which has seen ratepayers owing municipalities over R120-billion. The most affected are the more rural provinces on account of them not having the right quantity and kinds of technical capacity, as well as having the capability and affording rate payers space to consistently collect the requisite revenues to ensure consistent service delivery.”
The minister has listed the implementation of strategic sourcing and transparency as some of the ways the country can mitigate fiscal leakages, adding that stakeholder support and the acceleration of digital transformation would also be of great help.
“The implementation of strategic sourcing as an enabler in this process is critical and it is instrumental to the success of institutions. Through strategic sourcing costs are managed, leakages and wastages are prevented, continuity, and quality so that the institution can focus on the core competencies of their service-delivery mandate,” she said.
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