Treasury budget vote: Dysfunctional municipalities hampering SA’s economic growth

There is a concern around the growing number of dysfunctional municipalities hampering economic growth in South Africa.

This was revealed by Finance Minister Enoch Godongwana as he delivered the budget vote before parliament on Wednesday.

“As a country, we are faced with the formidable challenge of an increasing number of municipalities which are dysfunctional, either experiencing financial distress, or even having deteriorated into crisis,’ said Godongwana.

He said along with Cogta, the treasury will intensify efforts, interventions, and programmes to improve municipal audit outcomes with a specific target on those with the highest levels of irregular, fruitless and wasteful expenditure to “direct intervention in terms of Section 139(7) of the Constitution such as Lekwa and more recently Manuguang and Enoch Mgijima”.

“There are 43 municipalities that meet the criteria to be placed under mandatory intervention.

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“I have already written to the Premiers of all provinces in October last year identifying these municipalities and that the mandatory intervention process must begin in earnest.”

Finance Minister Enoch Godongwana

Godongwana said that helping municipalities back to financial health will boost the quality of life of residents.

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“It will encourage economic activity and investment, and it will encourage tax and ratepayers to pay for services.”

Treasury has allocated a sum of R2.8 trillion over the next three years, for which about R1.7 trillion is for transfers to provincial governments for the provincial equitable share.

Godongwana said that the government was prioritising the strengthening of public procurement in order to curb corruption.

This, he said, will ensure transparency, efficiency, effectiveness and impact of public procurement.

He said that the government was closing in on finalising the much-awaited Public Procurement Bill.

“This will strengthen data collection, enhancing analysis allowing for better reporting and subsequently increasing monitoring both by government and the public parties.

“Strengthening legislative frameworks, capacity, capabilities, systems, and processes of financial governance and management National Treasury will continue to play our role in fighting corruption and maladministration by conduct forensic audits, special performance audits, and review of internal controls.”