Finance minister Tito Mboweni told parliament that economic recovery will remain elusive as long as incompetent administration and poor financial management at municipalities remained unresolved.

Mboweni was speaking in the National Assembly on Thursday while outlining the policy priorities and spending plans (budget vote) of the National Treasury for the 2021/2022 financial year.

Mboweni used his speech to paint a grim picture of the state of financial management at municipal level, telling MPs that “political infighting and political interference” in administrative matters remained stumbling blocks.

The finance minister reported that there were 63 municipalities in financial distress, with 40 embroiled in financial and service delivery crises, while 102 more had adopted budgets they were unable to finance.

“And, for the first time in our democracy, the national executive has been ordered by a high court to constitutionally intervene in the affairs of a municipality owing to a financial and service delivery failure. As I make this submission before this house today, I am both the minister of finance also responsible for the Lekwa local municipality in Mpumalanga,” said Mboweni in reference to the council covering the town of Standerton.

The government last week dissolved the Lekwa municipality after a successful court bid by chicken producer Astral Food over the municipality's failure to deliver basic services such as clean water, which affected the chicken maker's capacity to remain operational.

“Honourable members, while the situation at the Lekwa municipality is extremely unfortunate, it shines a light on a number of issues affecting the performance of local government,” said Mboweni.

He said the much-needed economic recovery from crisis compounded by the coronavirus pandemic would remain a pipe dream as long shambolic municipal  governance is not eliminated.

“We can’t speak of economic recovery and prosperity when municipalities, as agents responsible for helping government achieve these objectives, find themselves in a perpetual crisis. In the Lekwa municipal intervention, the cabinet decided on May 12 2021 to dissolve the municipal council. We hope that this form of 'consequence management' will send the right signal to other municipal councils.”

Mboweni said government had spent “billions of rand” developing the skills of senior municipal officials, but there was little to show for it.

“Administrative incompetence will not be tolerated. National and provincial government have to date spent billions of rand in local government capacity-building programmes. The poor performance of many municipalities shows that there was almost a zero return on that investment.”

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