South Africa's municipal governance crisis shows the true price of ANC misrule: Brian Benfield

Key topics:

• Rampant municipal corruption undermines basic service delivery

• Cadre deployment fuels waste, incompetence, and decay

• Cape Town shows merit-based governance can restore efficiency

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By Brian Benfield*

South Africa is not grappling with marginal inefficiency in its municipalities. It is grappling with a colossal haemorrhage of capital and resources.

In a recent address to ANC municipal councillors, President Cyril Ramaphosa once more exhorted his party’s local representatives to discharge their duties with integrity and competence. That the head of state should feel compelled, repeatedly, to remind elected officials of such elementary obligations is itself a devastating commentary on the malaise afflicting local government.

Municipal administration, once a largely lean, professional instrument of service, has in far too many cases become a hollowed-out, politicised and corrupted entity. It devours resources, while presiding over the collapse of essential services and the all too obvious decay of infrastructure.

The scale of mismanagement is staggering. According to National Treasury’s consolidated municipal budget for 2023/24, the 257 municipalities collectively planned operating expenditure of approximately R542.7 billion. Of this, R153.4 billion was consumed by salaries and wages alone: an allocation far greater than that devoted to maintenance, a concept apparently alien to many South African councillors.

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Councillors themselves absorb R5.2 billion, while administrative staff, many drawn from the ranks of friends, relatives and politically-connected cadres, account for between R37 and R52 billion. Then comes the amorphous category of “other administrative expenses” which. excluding service provision, are estimated at between R70 and R120 billion.

Taken together, these items mean that between R110 and R170 billion each year is consumed by administrative expense in its narrowest sense: resources producing no tangible improvement in the lives of citizens. Consequently, in many cases more than a quarter of municipal operating budgets is squandered on overheads rather than devoted to clean water, reliable electricity, sanitation, refuse removal, and safe, pot-hole-free roads.

This profligacy arises not merely from bureaucratic bloat but from deliberate policy. The ANC’s system of cadre deployment rewards party loyalty and personal connection over competence and skill. Municipalities that ought to be staffed by engineers, accountants, planners and professional administrators have instead been transformed into patronage machines. Offices are filled with the idle politically-connected, while genuine expertise is sidelined. The result is a swollen yet ineffectual bureaucracy, where mediocrity and often malign incompetence flourish.

Corrosive effects

President Ramaphosa himself has acknowledged the corrosive effects of corruption, theft and maladministration. The Auditor-General’s reports confirm the pattern. Only a handful of municipalities achieve clean audits, while the vast majority display chronic irregular expenditure, defective supply-chain management and misappropriation on a grand scale. Blue-light cavalcades sweep through refuse-strewn suburbs, passing over potholes. They represent not authority, but detachment from the lived realities of ordinary citizens.

The true price of cadre deployment and corruption cannot be measured solely in the wasted billions of rands. It is borne in the collapse of services upon which communities and businesses depend. Entire towns are left without potable water. Electrical grids fail with numbing regularity. Refuse goes uncollected, sewage contaminates rivers, and small enterprises suffocate under the pall of municipal dysfunction. These are not abstract statistics, but the daily burdens carried disproportionately by the poorest South Africans.

Municipal failure radiates outward into the national economy. When water systems fail, enterprises close, jobs vanish, and households must shoulder the costs of a private supply. When electricity networks falter, production lines halt, investment retreats, and municipal revenues collapse further. The accumulation of refuse and untreated effluent results in public health crises, overwhelming a fragile health system.

In this way, local government dysfunction becomes a systemic impediment to growth. Our country’s catastrophic unemployment level cannot be remedied without functioning municipalities. Too many municipalities become actual obstacles to enterprise, actively repelling investment and thereby entrenching unemployment, inequality and poverty.

Alternative model

Yet there exists a contrasting alternative model within our borders. The City of Cape Town, under Democratic Alliance stewardship, has consistently achieved clean audits and sound financial management while delivering reliable services. It balances budgets, generates operational surpluses, and maintains infrastructure at levels that both attract investment and retain skills.

Unlike elsewhere, in Cape Town administrative expenditure does not overwhelm service delivery but facilitates it. The city has directed resources towards securing a water supply, diversifying electricity generation, enhancing waste management and maintaining transport systems. Citizens thus experience a functioning social contract. They pay their rates and taxes and in return, they receive reliable services.

The results are visible in economic outcomes. Cape Town has enjoyed stronger growth and job creation than most other national averages. It is sobering to reflect on what might have been achieved had municipalities across the country been administered to such a standard: how many jobs might have been created, how much infrastructure preserved, and how many communities spared decay and desperation.

The billions squandered on maladministration are not abstract figures but the hard-earned, mostly after-tax, contributions of South Africans. They are financed through property rates, service charges and national transfers. Each inflated rental contract granted to a politically connected landlord represents a library not built, a clinic unrepaired, a patient untreated. Each sinecure filled by a party loyalist displaces an engineer or planner whose energy and skills might have secured water supplies or repaired power lines.

As public demands grow

Meanwhile, South Africa’s fiscal envelope contracts even as public demands grow. Treasury cannot indefinitely sustain bailouts to failing municipalities. Citizens who can afford to are resorting to boreholes, solar panels and private security, effectively paying twice for their services. Those unable to do so are abandoned to ever-deteriorating conditions. Thus, the social contract itself erodes, with dire consequences for democratic legitimacy.

Reform requires candour and resolve. First, cadre deployment must be abandoned unequivocally. Municipal administration must be professionalised, with posts filled through open competition based on merit. Second, accountability must be enforced without compromise. Irregular expenditure must bring dismissals and prosecutions, not endless excuses. Third, priorities must be reordered. Municipalities are service institutions, not employment agencies for party loyalists.

The first call on every rand collected in rates and transfers must be for infrastructure maintenance and expansion. If the R110–170 billion now squandered on “administration” were redirected to service delivery, the decline of countless towns and cities across our beloved country would be reversed.

It is worth recalling that until the Remuneration of Public Office-Bearers Act No. 20 of 1998, councillors and mayors were not salaried at all.

They served purely for the honour of office, with only ad hoc expenses reimbursed. The contrast with today’s bloated salaries is stark. Numerous people have reputedly been assassinated merely so that rivals could fill their posts. This would likely never have happened pre-1998.

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President Ramaphosa’s admonitions to councillors will remain hollow unless backed by decisive action. Treasury’s figures are a stark warning: South Africa is suffering a massive haemorrhage of resources. The contrast with Cape Town proves that competence, integrity and efficiency are indeed attainable and can be successfully sought by every local municipal council.

Tragedy of maladministration

The stakes could scarcely be higher. Without functional municipalities, South Africa cannot achieve inclusive growth, attract investment, or preserve social cohesion. The tragedy of maladministration is written not only in squandered billions but in lives diminished and opportunities foregone. Yet the promise of reform is equally profound. That is the real possibility of restoring dignity, efficiency and integrity to the tier of government closest to the people.

Only when municipalities cease to be theatres of patronage and become once again instruments of public service, will the Republic arrest its downward spiral and reassert the dignity, hope and vision we all had at its birth.

*Dr Brian Benfield, a retired professor in the Department of Economics at the University of the Witwatersrand, is a Senior Associate and Board member of the Free Market Foundation.

This article was first published by Daily Friend and is republished with permission