{"id":826454,"date":"2025-06-02T13:00:00","date_gmt":"2025-06-02T11:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=826454"},"modified":"2025-06-02T11:47:46","modified_gmt":"2025-06-02T09:47:46","slug":"south-africa-biggest-cities-left-to-collapse-and-decay","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/826454\/south-africa-biggest-cities-left-to-collapse-and-decay\/","title":{"rendered":"South Africa biggest cities left to collapse and decay"},"content":{"rendered":"\n

South Africa\u2019s major metros oversee multi-billion rand budgets, but are left to collapse and decay in serious financial disrepair. Urgent intervention is needed on a national basis.\u00a0<\/p>\n\n\n\n

Auditor General Tsakani Maluleke has slammed the widespread poor financial performance of the nation\u2019s cities, with only one of the eight metros receiving a clean audit in 2023\/24. <\/p>\n\n\n\n

Maluleke said that the performance doesn\u2019t make sense due to the budgets and economic positioning of the cities.  <\/p>\n\n\n\n

\u201cThe eight metros across the country look after half of the expenditure budget for local government and provide services to 46% of South African households,\u201d she said<\/p>\n\n\n\n

\u201cTheir budgets are significant, and they sit in economic activity centres. They should have no difficulty attracting the skills they need to run their environments.\u201d<\/p>\n\n\n\n

Most metros failed with basic accounting standards, with the City of Cape Town the only one to receive a clean audit outcome. <\/p>\n\n\n\n

Buffalo City, Tshwane, Mangaung and Nelson Mandela Bay all received qualified audits, which indicate material failures in their accounts. <\/p>\n\n\n\n

Johannesburg, eThekwini and Ekurhuleni received unqualified audits with findings, suggesting that the accounts are reliable but that some matters require attention.<\/p>\n\n\n\n

Business Leadership South Africa CEO Busisiwe Mavuso said that the nation\u2019s metros are the country’s economic hubs, making it unacceptable that most cannot get basic financial management correct. <\/p>\n\n\n\n

\u201cIn the case of companies, if management is unable to produce reliable accounts that auditors are content to sign off, shareholders would revolt,\u201d said Mavuso.<\/p>\n\n\n\n

\u201cIn the case of our local government, the shareholders are the public who must exercise their votes.\u201d <\/p>\n\n\n\n

She added that failures in financial management are linked to a poor level of basic service delivery. <\/p>\n\n\n\n

The City of Johannesburg has become the poster child of the crisis.<\/p>\n\n\n\n

Despite having an almost R90 billion budget, most of the city’s traffic lights seem abandoned, and local roads are left to decay. <\/p>\n\n\n\n

This has become a national embarrassment, as the city plans to host the G20 Summit later this year.\u00a0<\/p>\n\n\n\n

What needs to be done <\/h2>\n\n\n
\n
\"\"<\/a>
Business Leadership South Africa Chief Executive, Busisiwe Mavuso<\/figcaption><\/figure><\/div>\n\n\n

The AG\u2019s report shows that a lack of financial management skills and vacancies drives the challenges.<\/p>\n\n\n\n

\u201cThere simply aren\u2019t enough qualified people working in local government to ensure the accounts are done properly. That is despite the billions at stake,\u201d said Mavuso. <\/p>\n\n\n\n

Although there has been an overall improvement in the performance of municipalities, this cannot be said of metros.<\/p>\n\n\n\n

The performance of metros has regressed since 2020\/21, with three metros downgraded over the last year. <\/p>\n\n\n\n

The AG noted that Johannesburg and Tshwane approved unfunded budgets. She also bemoaned the culture of municipalities approving unfunded budgets. <\/p>\n\n\n\n

\u201cIt should concern all South Africans that elected councillors can willingly approve spending plans for which there simply isn\u2019t the money.<\/strong> That is not budgeting, it is reckless spending,” said Mavuso.<\/p>\n\n\n\n

Mavuso stressed that the poor financial management of municipalities is now a national priority and one of the most significant constraints on economic growth. <\/p>\n\n\n\n

Service delivery failure often means businesses can\u2019t function, limiting employment and economic growth. <\/p>\n\n\n\n

The local government issues have, however, been given national prominence via Operation Vulindlela 2.0. <\/p>\n\n\n\n

The joint initiative by the National Treasury and the Presidency has made strong progress in tackling the electricity and logistics crises, among other reforms. <\/p>\n\n\n\n

\u201cThe need for decisive intervention in municipal performance is also very clear,\u201d said Mavuso.<\/p>\n\n\n\n

\u201cWe have to get people into municipalities who can deliver on action plans that will improve the financial function.\u201d <\/p>\n\n\n\n

The AG also highlighted weak information technology, driven by a lack of skills and controls. <\/p>\n\n\n\n

This shows the areas that Operation Vulindlela needs to target, mainly a large number of competent finance professionals, who will be required. <\/p>\n\n\n\n

There is also a much-needed review underway of the 1998 white paper on local government, which has the potential to overhaul policy and find ways to support local government. <\/p>\n\n\n\n

This should ensure better coordination between the local, provincial and national governments. <\/p>\n\n\n\n

 \u201cThe white paper should elevate the importance of consequence management, especially where there is a lack of performance and continuous service delivery issues,\u201d said Mavuso. <\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa’s major metros have multi-billion rand budgets at their disposal, but have been left to collapse and decay due to poor financial management.<\/p>\n","protected":false},"author":95,"featured_media":826457,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[19272,15351],"class_list":["post-826454","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-auditor-general-2","tag-blsa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/826454","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=826454"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/826454\/revisions"}],"predecessor-version":[{"id":826470,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/826454\/revisions\/826470"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/826457"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=826454"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=826454"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=826454"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}