Bryan Britton: Local Municipality deficiencies need ‘Einstein’ moment come August

With the local municipal elections set for August 3, author Bryan Britton takes a look at their overall performance.

Published on:

29 Apr 2016, 3:52 am

With the local municipal elections set for 3 August, author Bryan Britton takes a look at their overall performance. He uses the Ratings Afrika's Index, which evaluates the operating performance, management of liabilities, budget practices and liquidity position of municipalities, and scores each component out of 100. The number's aren't flattering, and the expectation is that service delivery and quality of living will deteriorate in South Africa over the short and medium term. – Stuart Lowman

By Bryan Britton*

"Insanity: doing the same thing over and over again and expecting different results.
Albert Einstein, German-born physicist (1879 – 1955)"

Ratings Afrika's Index evaluates the operating performance, management of liabilities, budget practices and liquidity position of municipalities, and scores each component out of 100.

Of the 100 municipalities analysed by the group, 60 scored an average under 50% – 42 of which scored under 35%.

The country had an average score of only 43% – a position it has maintained over the past five years, indicating inadequate financial management practices and discipline, which the ratings group pins squarely on the ANC.

"The political leaders of the municipalities in South Africa, whose responsibility it is to govern, have failed in the majority of municipalities, as reflected by their weak financial sustainability," the group said.

"The same thread is visible in many state-owned entities such as Eskom, SAA, Post Office and the SABC, where financial weakness is largely caused by weak financial governance on behalf of the political leaders and management in charge of these entities."

"The sad reality is that this weak financial governance is also prevalent in Central Government, which is now threatened with sovereign rating downgrades by the world's leading rating agencies," Ratings Afrika said.

Read also: Analysis: By-election trends suggest DA to govern Joburg, Tshwane in 2016

According to the report, of all South Africa's major metros, the City of Cape Town is the most financially sustainable, with a score of 75%. This is followed by Buffalo City (Eastern Cape) with 73% and Ekurhuleni (Gauteng) at 70%.

Ironically, Tshwane and City of Johannesburg (Gauteng) are the worst-run metros, despite being the wealthiest – managing a score of only 24% and 37%, respectively

"This reflects severe deficiencies in their budgeting practices and financial discipline," the group said.

SA provincial financial sustainability score (out of 100) – 5 year review

Province	2011	2012	2013	2014	2015
Western Cape	50	46	50	54	60
KwaZulu Natal	54	58	61	59	59
Northern Cape	41	50	45	49	49
Limpopo	46	47	44	50	43
Eastern Cape	53	49	42	38	41
Mpumalanga	32	33	30	27	30
Gauteng	29	28	35	34	30
North West	30	30	33	29	26
Free State	31	25	27	27	25
South Africa	43	42	43	43	43

SA metros financial sustainability score (out of 100)

Metro	2011	2012	2013	2014	2015
Cape Town	64	63	62	61	75
Buffalo City	50	57	77	78	73
Ekurhuleni	43	64	62	67	70
Nelson Mandela Bay	25	33	48	59	58
eThekwini	49	52	59	52	50
Manuang	30	34	57	62	38
Johannesburg	26	36	52	49	37
Tshwane	32	31	32	26	24
Average	40	46	56	57	53

According to Ratings Afrika, the expectation is that service delivery and quality of living will deteriorate in the country over the short and medium term.

"The current political leadership in control of the majority of municipalities has demonstrated over the last five years, and more, to not being capable of sound governance. This is the main cause of their low financial sustainability," Ratings Afrika said.

Mr Einstein please guide us in the upcoming Local Municipal Elections.