Gordhan said the Back to Basics Programme based this finding on four criteria, namely economic, tax and financial viability, and dependence on inter-government transfers.
The factors that led to dysfunction included political instability and problems with service delivery and institutional management. Responding to a written parliamentary question from the Economic Freedom Fighters, Gordhan said a number of strategies had been devised to address the situation.
These included direct interventions where municipalities had broken the law, strengthening district municipalities, and merging some municipalities. Another option was to abolish local municipalities and in their stead create district management areas.