The sustainability and growth of municipalities, according to Finance Minister, Enoch Godongwana, are the cornerstones upon which we must construct a larger and more inclusive national economy.
It still holds true today that we need to revive the local economy in order to improve the lives of our citizens and lay the foundation for their transition from poverty to wealth.
Although the precise difficulties may have changed, the goal has not altered, according to Godongwana.
Godongwana said in his remarks at the Chris Hani District Municipality Economic Development and Investment Summit on Thursday in Komani, Eastern Cape, that municipalities should try to understand the factors that affect businesses’ decisions regarding where to locate their operations in order to draw investment that supports sustainable job creation.
Although there is a temptation to create and provide intricate incentive systems, it is crucial to realize that any such interventions would be weakened by inadequate provision of fundamental services, according to Godongwana.
The Minister claimed that despite the strong democratic movement that overthrew apartheid, gave rise to progressive legislation, and established a constitutional framework that prioritizes socio-economic rights, poverty and inequality have grown in recent years.
This reversal is particularly clear in the way municipalities are currently run.
“You can see it in the frequent protests, where masses of people take to the streets to call for the provision of essential services and the right to a better life for their families.
You can see it in the factories, plants, and small businesses that close their doors and lay off employees due to a lack of reliable access to water and energy.
“You can see it in the way that roads are deteriorating because councils mismanaged their funds and lacked the technical know-how to maintain vital infrastructure.
Police stations are understaffed and under-resourced, and hospitals that can’t afford to hire nurses and physicians are overburdened, the Minister said.
You can see it in the breakdown of the rule of law and deteriorating standards of quality of life.
Municipalities must work and be the centres of economic growth, investment, and industrial innovation that is abundant in jobs and high on efficiency, he continued, in order to restore public confidence in democracy.
Municipalities and provinces must operate in a way that invites investment, he claimed, for this to occur.
“That entails attending to the communities they serve’s most fundamental needs. In terms of money, it entails abiding by high standards of governance and budgeting: using resources effectively and for the benefit of inclusive and sustainable growth, according to Godongwana.
The priority areas at the provincial level must be agriculture, roads, health, and education.
Infrastructure maintenance and improvement
The Minister also emphasized that municipalities must concentrate on attaining a significantly higher level of delivery for bulk infrastructure, such as water and electricity, as well as for essential services like garbage collection.
The Minister stated that improving and maintaining municipal infrastructure is one approach for municipalities to address the difficulties in providing basic services and opening up opportunities for high-growth enterprises.
Municipalities, he claimed, are underspending on infrastructure.
He said that over the past five years, the Chris Hani District Municipality has underspent on infrastructure funding and sent money back to the national revenue pool.
The Minister claims that the municipality failed to spend R38.9 million in 2016/17, which had to be returned to the National Treasury, and that R65 million was returned to the National Revenue Fund in 2017/18.
Nearly R240 million went unused in 2018–19. In 2019–20, that amount was R97 million.
The trend is alarming and obvious. It seems inconceivable that a municipality in a province whose indicators of poverty, inequality, and unemployment are constantly higher than the national average, such as the Eastern Cape, would choose not to spend money on delivering essential services.
Municipalities are definitely having difficulties, and in order to find solutions, we must comprehend the problems, according to Godongwana.