Important South African municipality has collapsed

Business interest group Sakeliga and the Democratic Alliance (DA) are attempting to get the troubled Ditsobotla Local Municipality (DLM) to be placed under administration by the national government.
They said that this is to replace the current “ineffective” provincial administration initiatives to restore service delivery, shifting the pressure of the ailing municipality directly to the national government and National Treasury.
However, the national government believes that there are currently “no grounds for a national intervention.”
The DLM, located in the North West, consists of towns like Lichtenburg, Coligny, and Ga-Raphalane and is home to over 200,000 residents.
It is a significant agricultural area boasting important manufacturing, wholesale, and retail industries.
However, the municipality has been plagued by a collapse in basic services, political instability, corruption and financial mismanagement.
This makes life and the operating environment an increasingly difficult task for residents and businesses.
BusinessTech travelled to Ditsobotla to talk to residents and stakeholders and see first-hand what the situation on the ground is like.
From the visits, we were told by business leaders and residents that the situation has deteriorated over the past 15 years.
They said the last five years were “particularly unbearable” because of significant service delivery failures relating to water, electricity, sanitation, and roads.
Several years ago, the North West Provincial Executive placed the municipality under mandatory intervention in terms of S139(5) (a) and (c) of the Constitution.
Section 139(5) mandates that if a municipality fails to provide basic services or meet financial commitments, the provincial executive must act according to the severity of the situation.
This can include imposing a recovery plan, dissolving the Municipal Council and appointing an administrator, or taking over the implementation of the recovery plan if the municipality cannot or will not do so.
Sakeliga’s intervention
“The Ditsobotla Local Municipality is almost entirely dysfunctional. Provincial interventions produce little improvement,” said business interest group Sakeliga.
Some things “still work at all is largely thanks to the businesspeople, farmers, community organisations and residents who exert intense pressure and make alternative plans,” they added.
“We really did our best to get our municipality to work with us, but they have continuously ignored us,” said Naude Pienaar from the Ditsobotla Services Association (DSA).
DSA is an organisation founded by local businesspeople to carry out alternative service delivery, administration and negotiation.
He said that this action was born out of necessity, not desire.
Several years ago, at the invitation of AgriNW and other stakeholders, Sakeliga took the DLM to court.
“Sakeliga is litigating to restore order in Ditsobotla Municipality and create models for revitalizing failed towns and municipalities nationwide,” said the group.
Court judgements have included urgent interventions for the supply of water and electricity.
One of the notable rulings was when the court ordered the North West Provincial Government at the end of 2023 to intervene and place the municipality under section 139(5) provincial administration.
The DLM was also ordered to report every three months to Sakeliga and local partners.
Now, the litigation team is documenting evidence of where provincial intervention is failing for a possible court order of Section 139(7) national administration, “shifting the pressure directly to the national government and National Treasury. ”
“If evidence allows, businesses may consider funding additional court cases for interim or alternative relief of urgent problems,” said Sakeliga.
Pienaar said that the DSA has urged for an independent forensic audit of the municipality.
“What is said about what the money is being spent on, like infrastructure upgrades, versus what is actually happening on the ground does not match up,” said Pienaar.
Sakeliga said that irrespective of the litigation process, alternative structures such as the DSA “can already start to accumulate funds, keep records, perform some services themselves, and lay a basis for future negotiations on a better Ditsobotla.”
The DA joins the fight
The DA in the North West also called for the national government to urgently place the DLM under Section 139(7) national administration.
On 10 January 2025, DA NW MPL Chris Steyl wrote a letter to the President, the Ministers of Cooperative Governance and Traditional Affairs (COGTA), and Finance, asking them to “take control of the situation.”
“The Ditsobotla Local Municipality has collapsed, is completely bankrupt, with its liabilities exceeding its assets,” said Steyl. “Service providers cannot be paid and refuse to respond to job orders.”
“Water and electricity infrastructure has completely collapsed, leaving large sections of the municipality without any water and electricity supply for weeks on end, never mind the inability of the administration to respond to other service delivery needs,” he added.
The municipality has been under numerous provincial Section 139 interventions. However, the party believes that a national administration would bring results.
Steyl said that through a national Section 139(7), this could see an independent financial assessment, a recovery plan, and a skills audit for senior and middle management.
He added that officials lacking qualifications or involved in corruption should be removed and prosecuted, with asset forfeiture initiated.
Section 139(7) not on the cards right now, says Treasury
National Treasury confirmed it had received the letter from the prty; it said that “at this stage, there are no grounds for a national intervention.”
It said that the Provincial Executive has placed the municipality under mandatory intervention, and as such, the National Treasury developed a Financial Recovery Plan (FRP) for Ditsobotla, which was approved by the MEC for Finance in August 2023.
It said that the plan, based on a comprehensive assessment, addressed concerns raised by the DA.
Following approval, the FRP was imposed on the municipality, and a Provincial Executive Representative (PER) was appointed to oversee its implementation.
“It is important to recognise that the crisis at the Ditsobotla local municipality is deep-rooted and has existed for some time. Therefore, resolving the nature and depth of these problems will require significant time and effort before changes are evident to the community,” said Treasury.
It added that the municipality must work with and support the efforts of PER in ensuring that the FRP is properly implemented so that these benefits are realised sooner rather than later.
“It is therefore premature at this point to invoke a S139(7) intervention as the province has demonstrated that it is addressing the problem in the Ditsobotla local municipality,” said Treasury.
Treasury added that “dealing with the magnitude of the challenges will require time, effort and financial resources that are currently unavailable.”
At this point, the national government said that it is allowing the provincial executive “time and space” to oversee the provincial mandatory intervention invoked.
“The national executive will consider the invocation of section 139(7) intervention only if the jurisdictional facts for a national intervention have been met,” said Treasury.
The Department of Cooperative Governance and Traditional Affairs said that it is in agreement with the views of Treasury.
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