14 FEBRUARY 2023

Speaker of the National Assembly, Honourable Nosiviwe Mapisa-Nqakula;

The Chairperson of the NCOP, Honourable Amos Masondo;

Your Excellency; President Cyril Ramaphosa;

His Excellency; Deputy President David Mabuza;
Honourable Premiers;

President of SALGA, Cllr. Bheke Stofile

Honourable Members;

Good Afternoon
 

The White Paper on Local Government foresee a government in arms, working together and not against each other. It places local government as everybody’s business. So DDM is a constitutional approach which pragmatically enables both S152 in pursuit of the objects of local government and S154 in support of municipalities.

For us to adequately ensure that local government is everybody’s business and is able to respond to the capable and developmental state, we need to collectively and collaboratively ensure an efficient, effective, and financially sustainable local government. To this end, NT leads undertakings on local government financial management matters, whilst DCoG leads on governance, institutional development, citizen engagement and coordinate service delivery in collaboration with sector departments, and SALGA is driving the empowerment process of both administrators to perform their functions better and also Councillors to improve their oversight responsibilities and enforce accountability.

This multipronged approach operates under different development pillars and goals and also ensures as part of Monitoring and Oversight – DPME, AGSA, STATSSA are involved and assist in overseeing municipal performance through planning, budgeting, streamline reporting. These team has initiated reforms like performance indicators for local government that are being piloted across all municipalities towards developing an Early Warning System whose main objective is to ensure that we diagnose challenges early and promptly provide support before a municipality become dysfunctional i.e. “early diagnosis and prompt treatment”,

Supporting Service Delivery and Infrastructure

Access to basic services remains a challenge in some of our communities, especially in the rural parts of the country and informal settlements in the urban areas. The improvement of local government service delivery, including the provision of electricity, water and sanitation, is therefore a critical aspect of our developmental state.

In response to this challenge, as COGTA we have dispatched engineers and technical experts through MISA, that are implementing a range of capacity building interventions. Last year Honourable Speaker, we reported 229 municipal officials who were afforded the opportunity to acquire formal qualifications through the Recognition of Prior Learning (RPL). Process controllers to deal with Waste Water Treatment Works to ensure green drop compliance, artisans like bricklayers, plumbers, electricians and millwrights.

In the current financial year, an additional 100 municipal officials are enrolled for the RPL Programme to reduces outsourcing of core municipal technical work.

In collaboration with the South African Institute of Civil Engineers (SAICE), we are further providing to date, 1 292 Municipal officials were afforded the opportunity to improve their technical skills. Currently, 500 municipal officials are on training.

Furthermore, in collaboration with the University of Cape Town, COGTA has developed Unit Cost Guidelines to assist in providing infrastructure cost estimates as one source of planning, budgeting and implementation monitoring. The Guidelines can now be used by municipalities when pricing for their projects, but also communities, oversight structures and law enforcement agencies to gauge if municipal pricing is market-related and justifiable. They were put to test during the assessment of municipal infrastructure that was damaged by floods in April 2022.

103 built environment professionals (86 of which are professionally registered with Statutory bodies as engineers and town planners). professionals to municipalities in accordance with the District Development Model (DDM) to provide technical support and redress apartheid spatial distortions. They assist municipalities throughout product life cycle from inception, planning, design development, implementation, operations and maintenance. On top of environment professionals, in this current financial year, 150 Young Graduates have been deployed to augment the technical capacity whilst pursuing professional registration. These technical professionals also support municipalities to employ and maximise labour intensive construction (LIC).

To support this technical initiatives, COGTA has reviewed, Municipal Infrastructure Grant (MIG) to make provision for 20% of the grant to be utilised for labour intensive construction methods. A total number of 19 324 jobs have been created from the municipal infrastructure projects in all MIG receiving municipalities as at the end of December 2022. For example, Hessequa Local municipality created 759 employment opportunities utilising interlocking paving bricks for road surfacing.

Energy Policy Response– Madam Speaker, we are indeed excited that policy direction is emerging that would finally see municipalities buy power from independent power producers. This will present municipalities with the ability to negotiate cheaper bulk electricity prices and as a consequence pass these onto consumers, who are already under tremendous taxation strain. Loadshedding results in service delivery disruptions which have an adverse impact on the functionality of some key priority infrastructure like pump stations, water reservoirs telemetry systems and waste water treatment works. COGTA has implemented two feasibilities studies for Municipal Renewable Energy MasterPlan in Amathole District Municipality as well as the Eastern Seaboard, scheduled to be completed by 30 May 2023 and 30 June 2023 respectively.

Conversion of Integrated National Electrification Program (INEP) conditions to allow for allocation to be made to municipalities for the installation of roof-top solar panels for househoulds (particularly rural areas). Funding of energy storage facility (battery powered storage) so that in the event of loadshedding, it can be channelled to priority infrastructure for continuous operations

Building municipal capacity and supporting dysfunctional municipalities

Strengthening municipal capacity and performance is critical in improving service delivery outcomes over the next five years of local government. Based on the 2022 State of Local Government Report to Cabinet, 66 municipalities have been identified as dysfunctional an increase from 64 of 2021. We are seeing green shots beginning to emerge, in 2021 we had 16 stable municipalities, but have doubled that number to 31. Provinces have reported on the development of Municipal Service Improvement Plans (MSIPS) for the affected municipalities, Financial Recovery Plans in some cases and assessment visits to the municipalities.

Post the Local Government elections, just over 30 municipalities are currently under intervention with the majority being intervened in terms of S139 (5) read together with the MFMA.

Drawing from the existing reporting tools and the SOLG report, COGTA has developed a standardized municipal performance assessment tool to enable a uniform reporting across provinces, incorporating indicators from the MFMA, back to basics priorities etc.

Honourable Speaker, drawing us back from firmly cementing the steady improvement is our hung municipalities in how they manage coalitions. Of course, our democracy is giving practical expression to the values of multiparty governance, however this also means that our legislative and policy environment needs to continuously adapt to the dictates of the new realities.

Interestingly, these coalition agreements were crafted with the sole intention of destabilizing the ANC and remove it from power at all costs. We observed immediately after the 2021 LG elections, political parties, converging, drafting their so called coalition agreements. There was nothing fundamental to this agreement except blocking those who don black, green and gold even in municipalities where the voters accorded them a majority votes.

Madam Speaker, let me thank the honourable President for keeping still and calm, even in the midst of pressure to sell the developmental ethos of the ANC. You are vindicated today, these coalition agreements have been put to test. There are no goals, no vision, no plan but worse no program of action. They operate on a stop and go mode. This as we have seen, tends to accentuate problems in the political-administrative interface.

Honourable members, some of you thinks the resignation of Mayor of Tshwane is the only sign of the cracks of their coalition. No you are wrong, in 2016 – 2021 term, they failed to perform one of the simplest tasks- elections of ward committee committees. This coalition operated for whole term violation the basic tenets of community participation. So some of us were not amazed but rather perplexed that hawu lendoda ihamba ezizulwini zobusuku – in the stillness of the night!

He waits for all of us, including his residents to sleep having a Mayor and wake up having no Mayor. He does so, Honourable Speaker because he adds into the trail of distraction of his predecessors from 12 billion Glad Africa extravaganza of Solly Msimango, 10 billion unaccounted for, 1-billion-rand debt to Rand Water and another R1.4 billion rand owed to Eskom and Wi-Fi connection for our students has been discontinued. Transport system at a halt, buses at a standstill! And why? Because there is no fuel. A Re Yeng has been successfully turned into Are Ye Felo! Asiyindawo!

The DA alliance led coalition has produced 4 Mayors in 6 years, 6 months. So on average, a DA Mayor governed for about 19 months. What an era!

The less said about the unfortunate departure of Mayor Phalatse, the better!
 

Honourable Members, Metros and Intermediatory Cities collectively account for a total 64% of our population. Much talk has been made of the instability of the coalition governments we have. One of the unfortunate consequences of the proportional representation system at LG is that it has led to a plethora of small parties, in many cases having less than 1% of the vote. Most PR system countries like Germany and Denmark have thresholds to address this. In the outcome of 2021 elections, if the threshold principle is applied, in eThekwini Municipality for example, there would only be 5 parties. This will assist in ensuring that where there is a need for coalitions, more substantive arrangements between parties could be made.

Revenue Enhancement Strategies

Honourable Members, without introducing more financial streams created to assist municipality to collect some revenue and be financially stable. Amending the Tax Administration Act so that before SARS pays tax refunds, they first check is the particular tax payer does not have monies due to his/her municipality. If the tax payer owes, the amount due to the municipality will be paid first before a refund is deposited to the tax pay account.

Amend schedule 2 section 10 of the Municipal System Act so that it is not only municipal councillors and employees who may not be in arrears with their municipal bills for a period more than three months. This requirement should be extended to all state employees and elected and appointed representatives in other spheres.

Establish a District Revenue Collection Agency. This will achieve better collection efficiencies and will free up municipal personnel to focus on more pressing service deliver efforts. SARS systems and processes would be considered in putting this together after due diligence is done.

Amending the Procurement Regulations to make it compulsory for any potential service provider to produce a Municipal Services Rates compliance certificate, prior to being awarded a government contract.

Amending the Vehicle Licencing Registration Regulations to withhold the issuing of vehicles licences if municipal rates and service charges are outstanding

Put together measures to review and incentivise payment of the ever increasing household debts to municipalities, in exchange for the installation of prepaid water and electricity metres;

Promoting Economic Development and Recovery

COGTA has been supporting the alignment of economic recovery plans with the One Plans in the Districts to leverage on the identified potential and identified comparative advantages. These plans contain a bouquet of interventions targeting various sectors in the economy to mitigate the worst immediate effects of the pandemic and recently loadshedding on businesses, on communities and on individuals such as:

Rental discount for informal businesses like Street traders, Reduction of all application fees (including land use and building plan applications), Reclassify accommodations (guesthouses and BnBs) to residential to ease tax burden and increase tourism and Rates deferment /Rates Payment Arrangements with small businesses.

Our local economic development efforts will no doubt be enhanced by the visionary work that the institution of Traditional and Khoi-San leadership has come up with in the form of the Rural MasterPlan. This plan seeks to convert rural challenges into investable opportunities, covering critical areas as infrastructure and agriculture development.

Poverty Alleviation Programme

We have already seen significant improvements in the operational efficiency of the programme since the adoption of the new CWP Implementation Policy in 2021.  The savings realised through this process allowed us to increase the daily stipend paid to participants from R97.50 to the current R110 per day, and to increase the target number of participants from 250,000 to 255,000, within existing budget allocations. 

One of the key features of our new approach is to place less reliance on a small group of implementing agents, with greater emphasis on implementing partners drawn from all spheres of government and the private sector.

For example, in partnership with the Department of Correctional Services in Barberton facilitated the cultivation of hectares of land to feed the vulnerable of Mjindini Township. 30 Parolees were integrated into the CWP as part of the partnership. The Wits Foundation in Braamfontein partnered with CWP to train participants in 4IR. This provided participants with exposure to robotics and to jobs that they can create in the digital space.

Capacity or Support Response

COGTA have made huge strides towards the professionalization of LG, Municipal Systems Amendment Act embarks today on a process to fill critical senior management post utilising the indicators and competency framework.

Prototype staff establishments

A study commissioned by the Department in 2018/19 revealed that many municipalities have bloated staff establishments and are spending more than 40% (forty) of their operating budget on employee compensation. Over the medium term, the Department will pilot and validate the prototype staff establishments in one hundred and one (101) municipalities to give priority to the basic needs of and to promote the social and economic development of the communities.

Traditional and Khoi-san Leadership

We have also made good progress in creating a sound legal basis for the institution of traditional and Khoi-san leadership to function. The Traditional and Khoi-san Leadership Act has now been signed into law, and it among others makes provision for the recognition of Khoi-san communities and leaders, which I must add, is a first in the history of our country. To give effect to this provision, we have appointed a Commission on Khoi-san Matters, and the Commission is currently receiving applications for the recognition of Khoi-san communities and leaders.

The Customary Initiation Act has also been signed into law, and working with our provincial counterparts, focus has been on putting in place institutional mechanisms provided for in the Act to promote safer initiation practices. These include the National Initiation Oversight Committee and the Provincial Initiation Coordinating Committees. The overarching objective for this safe initiation practices is informed by our desire and the rallying call of “Mabaye bephila babuye bephila”.

Accountability Framework– As part of efforts to ensure that governance is enhanced, and that accountability in municipal councils is improved, the Department introduced the establishment of Municipal Public Accounts and all have received training. COGTA further launched the National Anti-Corruption Forum, which is comprised of the National Prosecuting Authority, the Special Investigative Unit and will look closely into corruption cases in municipalities, speedily investigates and prosecute where necessary.

GovChat Social Media Platform

At the core of good governance is public participation in our democracy. COGTA is rolling out GovChat, a social media-based community engagement platform that is implemented through Open Government Partnerships. Our citizens can now use GovChat to know their ward Councillor, Traditional Leader, report service delivery issues, rate and find public facilities like a clinic, school, hospital and municipal offices. Communities can also register their complaints, like service delivery failures, potholes, electricity faults and water disruptions and leaks.

CONCLUSION

As I conclude Honourable Speaker, the journey of local government over the past 25 years in South Africa has been AN IMPERFECT TRANSITION. But we shall not tire. Our resolve to improve the state of local government was further emboldened by the support that we received during the holding of the 2-day local government summit on 27 and 28 September 2022. Our stakeholders were clear that we had to intervene in the following areas:

• Deepening the implementation of the District Development Model; promoting local economic development to fight poverty, inequality and strengthening of Financial Systems and Capacities at Local Sphere.
   

With persistence, some of the key notable achievements were recorded as per the 2022 Division of Revenue Bill, 2020/21 audited financial outcomes:

• The MIG programme was allocated R14.5 billion in the 2020/21 financial year. The full amount was transferred and 91 per cent of this was reported as spent by municipalities.
• 53 469 households were provided with basic water; 43 979 households provided with sanitation services and 79 671 households provided with street and community lighting.
• COGTA, through MISA completed 118 boreholes for water provision and no less than 24 000 households. In the 2022/23 FY, 39 borehole projects are being implemented in line with S154 which mandates national and provincial government to assist municipalities to deliver basic services
• Community infrastructure with regard to waste collection and disposal have been developed.11 central collection points for refuse, transfer stations, recycling facilities and solid waste disposal sites have been developed
• 1 474 kilometres of municipal roads developed