These are the best and worst run municipalities in South Africa

 ·18 Apr 2019

Two new independent reports have been published which assess the financial stability, and governance of South Africa’s municipalities.

The Municipal Financial Stability Index published by Ratings Afrika, assesses how the country’s municipalities manage their money, and how this impacts service delivery in those areas.

The group defines financial stability as the ability to deliver services, develop and maintain the infrastructure required by its residents without unplanned increases in rates and taxes or a reduction in the level of services.

It also means a municipality is able to absorb financial shocks caused by external factors, without needing financial assistance from third parties.

To determine the top and bottom performers in this index, Ratings Afrika assessed the financial statements of municipalities to June 2018, as reported to National Treasury.

Worryingly, the 2018 index found that most of the municipalities in South Africa are in financial distress, lacking proper budget planning and not exercising adequate fiscal discipline, with expenses exceeding income and resulting in losses.

“Only 23 municipalities from the sample of 100 have reported operating surpluses, with the remaining 77 reporting operating deficits,” Ratings Afrika said.

“The combined profits of those with a surplus amount to only R1.4 billion, whereas the combined losses amount to R13.3 billion.”

Further, the combined working capital shortfall for the sample was R23 billion – making it almost impossible for these municipalities to provide any services, it said.

“This might lead to a total breakdown in service delivery, with catastrophic consequences for residents and businesses, which in turn could encourage political unrest.”

Looking at specific areas, the weakest provinces are Free State and North West, with average scores of 17 and 24 respectively. The majority of the municipalities in these provinces are in serious financial trouble, the group said.

The Western Cape, with an average of 63, is the highest scoring province and it is also the province that has improved the most over the last five years, from 52 in 2014 to 63 in 2018. Western
Cape is the only province whose governance practices are considered to be sound.

The tables below show the best and worst municipalities in each province:

Best and worst-run municipalities

A second report, Government Performance Index for 2019, comes from think-tank Good Governance Africa (GGA).

GGA’s index ranks 213 local municipalities from best to worst based on how they deliver across three main indicators: quality of administration, economic development, and service delivery.

In the group’s analysis it looked at whether a municipality has enough skilled personnel to manage the running of the area, and how it delivers on services like providing water, sanitation, education, electricity, housing, waste removal, healthcare and policing.

Financial management and reporting is also analysed.

According to the GGA index, Mossel Bay municipality is the best-reun municipality in the country, followed by the Senqu municipality in the Eastern Cape.

Of the top 20 municipalities, 12 are in the Western Cape, and 11 are run by the Democratic Alliance, with four others being DA/other party coalitions.

On the opposite end of the scales, Msinga municipality in KwaZulu Natal was ranked as the worst-run in the country, below uMhlabuyalingana in the same province.

Among the bottom 20 municipalities, nine are found in KwaZulu Natal, and seven are in the Eastern Cape. Most are ANC-led, with the IFP running four of them.

The table below outlines the top and bottom 20 municipalities in the country, according to GGA.

# Municipality Province Party # Municipality Province Party
1 Mossel Bay WC DA 194 Nyandeni EC ANC
2 Senqu EC ANC 195 Jozini KZN IFP-led
3 Swartland WC DA 196 Nongoma KZN ANC
4 Sol Plaatje NC ANC 197 Makhuduthamaga LP ANC
5 Greater Kokstad KZN ANC 198 Thembisile Hani MP ANC
6 Midvaal GP DA 199 Greater Taung NW ANC
7 Khai-Ma Local NC ANC 200 Ratlou NW ANC
8 Bergrivier WC DA/KGP 201 Mbhashe EC ANC
9 Cape Agulhas WC DA 202 Maphumulo KZN ANC
10 Prince Albert WC DA/KGP 203 Ndwedwe KZN ANC
11 Swellendam WC DA 204 Nquthu KZN IFP
12 Cederberg WC DA 205 Umzumbe KZN ANC
13 Matzikama WC DA 206 Mbizana EC ANC
14 Overstrand WC DA/COPE 207 Engcobo EC ANC
15 Witzenberg WC DA 208 Matatiele EC ANC
16 Koukamma EC DA 209 Nkandla KZN IFP
17 Hantam NC DA/FF+ 210 Ntabankulu EC ANC
18 Nama Khoi NC ANC/KSR 211 Port St Johns EC ANC
19 Hessequa WC DA 212 uMhlabuyalingana KZN ANC
20 Langeberg WC DA 213 Msinga KZN IFP

According to Ratings Afrika, the South African municipal sector is currently facing collapse – and correction will require decisive political leadership that looks after the interests of the residents including that of the business community.

While not mentioning the ANC by name, the group said that 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 the deteriorating financial sustainability of the municipal sector in South Africa,” it said.

It suggested that leaders stop looking after their own interests, root out corruption, appoint managers with the right skills and experience to implement sound budgetary practices, and exercise strict financial discipline.

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