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HomeNewsDlamini Zuma says govt is looking at changing funding models for municipalities

Dlamini Zuma says govt is looking at changing funding models for municipalities

Dlamini Zuma says govt is looking at changing funding models for municipalities

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Johannesburg – Twenty-two years after South Africa dumped the apartheid model for municipalities and adopted the wall-to-wall system, the government is admitting that the latest one has encountered serious financial setbacks.

The admission was made by Dr Nkosazana Dlamini-Zuma on Tuesday during her opening address of the two-day local government summit in Johannesburg.

Dlamini-Zuma, the minister of the Department of Co-operative Governance and Traditional Affairs (Cogta), said some of the obstacles were not foreseen.

According to a November 2020 discussion paper which was put together by Dr Mike Sutcliffe, the former city manager of eThekwini who now heads City Insight, a consulting firm on local government issues, the wall-to-wall model was implemented in the year 2000.

That followed a transitional period from 1996 where even big metros like eThekwini were divided into small municipalities which were later merged to form the current metropolitan municipality.

The system meant that every inch of the country should be covered by a municipality, moving away from the apartheid system where certain areas, mainly black-dominated ones, were not covered for municipal services which are periodically levied.

Over two decades later, Dlamini-Zuma said the wall-to-wall model was flawed because it did not anticipate that municipal services would have to be provided to people who are indigent and unable to pay for them.

One of the early challenges for the system was cross-border municipalities like Merafong (Gauteng and North West) and Matatiele (which was both in KZN and the Eastern Cape) and when it was resolved, it sparked violent protests by communities who resisted moves to be incorporated into poorly performing provinces.

“We must acknowledge that we inherited a deeply divided society which was spatially, culturally, economically and environmentally fragmented and divided.

“So, as we try to institute the wall-to-wall municipality system to broaden the reach of the state to ensure that no one is left behind and that everyone has services delivered by the democratic government and their local sphere.

“But let me say that we did not sufficiently interrogate some of the key assumptions at the time because we based the funding model on the assumption that every municipality has a revenue base from which to get its revenue and put together its budget.

“We did not take into account that this wall-to-wall municipality means that we are extending services to people who are indigent, there is high unemployment.

“So some of the municipalities are not able to raise their own revenue but they still have to provide services to the communities,” Dlamini-Zuma told the summit.

To remedy that poor foresight issue, she said they are looking at completely overhauling the funding model for municipalities.

“So, it is something under discussion that the funding model must change. So, we hope that won’t take long, to change the funding model so that we can better address the aspiration and the needs of the local people as we have always said batho pele (people first). ”

Although Dlamini-Zuma also admitted that there are challenges in some municipalities, she said one of the best things that can be done is to ask the best-performing municipalities to share best practices with struggling ones.

The minister also lamented that it is too costly for municipalities in sparsely populated areas like in the Northern Cape to provide services to people while it is easy for their counterparts in provinces like Gauteng as a large number of people is concentrated in a small area.

Speaking during a panel discussion on addressing governance, anti-corruption and stability in municipalities at the same summit, Enoch Godongwana, the country’s minister of finance, said it was mind-boggling why every department, including municipalities, always come to him looking for more money.

He said billions get lost in wasteful expenditure and if that gap can be closed, the money municipalities always come looking for from his department can be available to them to serve the people.


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