Amalgamation no silver bullet for struggling municipalities

Some municipalities are not sustainable due to socio-economic conditions in the area in which they are located and simply amalgamating them with other municipalities may not solve their problems.

Government must fundamentally assess the funding model, says Jane Thupana, chairperson of the Municipal Demarcation Board (MDB).

Thupana told journalists at a media briefing hosted by the National Press Club that 70-80% of the population in municipalities, especially those located in the former homelands, are dependent on social grants.

She said the economic infrastructure in those areas is weak and due to the municipality’s inability to generate revenue, it becomes an amalgamation candidate.

However, the problem does not necessarily originate in the municipality itself and amalgamating it with another municipality may not be the right way to solve the issue if the funding model is in fact flawed, she said.

She said even where amalgamations seem to be the right way to go, demarcation is only one factor that determines the success of the new entity. The MDB has no part in the institutional arrangements of the new entity and this, together with factors such as governance, could affect the outcome.

She said former minister of cooperative governance and traditional affairs Pravin Gordhan submitted a list of 34 struggling municipalities to the MDB to be amalgamated with stronger entities. The board however approved only 12 of those as appropriate candidates.

Thupana said early results from a capacity assessment of all municipalities show that professional and executive skills are concentrated in the Western Cape and Gauteng. The greatest weakness in this regard is found in Limpopo, North West and Mpumalanga, and to a lesser extent in the Eastern Cape.

High turnover

This includes technical skills needed for service delivery as well as financial management skills at the level of municipal manager and chief financial officer. The turnover in these positions is high, she said.

The auditor-general’s findings also reflect this uneven spread of skills in the annual audit outcomes, Thupana said.

MDB CEO Sigidi Muthotho said around 70% of the skills located in municipalities are concentrated in only 27 municipalities out of 257. These are the 19 larger ‘secondary’ cities and the metros.

The MDB will publish an assessment report for every individual municipality in March.

Thupana said South Africa is unique in Africa and one of few countries in the world where municipal boundaries are determined by an independent institution. In countries like the United States this is a function of government.

She said the formula for determining the number of councillors per municipality is prescribed by law and that the member of the executive committee (MEC) responsible for local government in every province determines the exact number according to the formula. The MEC is allowed to deviate by 10%.

Politicians do not however always appreciate that an increase in the number of councillors means the number of wards will also be increased. It is then the task of the MDB to determine the borders of the new and affected wards.

More wards, more demands

More wards means the demand for resources also increases and a change in ward boundaries is disruptive to service delivery, which is mostly ward-based, Thupana said. She used the example of someone who falls off the waiting list for housing after being on it for several years because the delimitation places them in a new ward.

This could lead to dissatisfaction and protest action, and affected persons wrongly blaming the MDB, she said.

The MDB has as a result started to work with politicians proactively to prevent unintended consequences. It does projections and alerts them to the possible outcome of decisions affecting the number of councillors, Thupana said.

Thupana also said the MDB has no mandate to change provincial borders. This is done by parliament and requires a change in the Constitution. Only after such a decision has been taken is the MDB tasked with determining the ward and municipal boundaries to give effect to the change in provincial borders. Communities don’t understand this and try to put pressure on the MDB if they are unhappy with the province their municipality is located in.

She said the MDB works closely with the Independent Electoral Commission (IEC) and, in the run-up to the elections in May this year, alerts it to possible protest action related to border disputes.

Read: Municipalities just don’t listen – Auditor-General