By Yasin Maoni
1. INTRODUCTION
The adoption of the White Paper which harnessed the vision of the 1996 constitution and set
out a bold vision of developmental local government, it has formally guided government in an endeavour to
translate the vision of developmental local government into reality. However, a
number of problems were encountered in the process. This paper argues that
amongst many challenges the lack of capacity and expertise and financial
mismanagement are the two major factors that have influenced the implementation
of the White Paper. The paper examines the influence that these factors have
had on local government policy. The assertion is that these two factors
hindered the progress of the implementation of the vision of the White Paper,
and in the long run further influenced the overall government policy on local government.
The paper begins with outlining the underlying core vision
of the White paper; the concept of developmental local government. It further
in detail examines these two factors in the context of implementation of the
vision of the White Paper. The analysis of the influence of these problems is
then followed by concluding remarks.
2 THE UNDERLYING
VISION OF THE WHITE PAPER ON LOCAL GOVERNMENT 1998
The underlying principle which holds the vision of the White
Paper is the concept of developmental local government.[1]
The White Paper itself defined developmental local government as local
government committed to working with citizens and groups within the community
to find sustainable ways to meet their social, economic and material needs and
improve the quality of their lives. From the definition itself, one can
conclude that the main goal of developmental local government was and has been
the improvement of the quality of lives of the citizens by meeting their
social, economic and material needs. The idea of sustainability and people’s
participation also finds its way into the definition. The principles of
developmental local government was out of the aim of giving the municipalities
a framework within which they were to develop their own strategies for meeting
local needs by, among other things, capacitating and transforming the
municipalities.[2]
The four elements characterising developmental local
government as per the White Paper were: (a) maximising social development and
economic growth, (b) integrating and co-coordinating, (c) democratizing
development and (d) leading through learning, which was aimed at making the
people themselves through context and experience find sound leadership. To
direct the developmental agenda the White Paper set developmental outcomes
against which the progress of developmental local government are to be
measured. These were (a) the provision of household infrastructure and services
to a sufficient measure as an essential component. They encompassed services
like water, sanitation, local roads, storm water drainage, refuse collection
and electricity, (b) erection of liveable, integrated cities , towns and rural
areas , (c) visible local economic development and (d) community empowerment.
As the White Paper was being implemented some challenges and
problems were encountered. There are a number of challenges but this paper
focuses on two; lack of capacity and expertise to implement the vision of developmental
local government and financial mismanagement.
3. LACK OF CAPACITY AND EXPERTISE
3.1. The problem
The problem is historical in that the effects of the
apartheid system of segregation which marginalised the other racial groups of
the society were still visible. The White Paper itself acknowledges this fact
in[3].
It states that there was lack of structure support for municipalities to manage
the change during the transition period. At the time of framing the White
Paper, it appears, this problem was prevalent as also shown and stated that
many administrations of the municipalities were still hugely incapacitated.[4]
This was, relevant to this discussion, that many of the frontline workers
remained without necessary skills and disempowered. In addition, in many cases there
was lack of performance management systems. This contributed to poor service
delivery and in turn failing the vision of developmental local government. The
White Paper also mentioned substantial variation in capacity among the
municipalities, stemming from the historical context of segregation and
marginalization. Further, some municipalities had little or no pre-existing
institutional foundation which was a challenge facing local governments.[5]
The capacity and skills problem seems to have gone on for
the years to follow. It is indicated, without prejudice to the progress and
effort made in capacity building over the years, that lack of adequate institutional
capacity remains a significant challenge up to now.[6]
This has also been accepted by the African National Congress (ANC) subcommittee
who mentions the municipal capacity and skills deficiency as one of the
challenges affecting performance.[7]
The same factor has been mentioned as the reason some municipalities were
considered to be unsustainable and failing the vision of the White Paper’s
developmental local government.[8]
The Good governance Learning Network (GGLN) also points to the same problem as
contributing to the failure of realisation of the vision of the White Paper,
though its analysis is biased to failure of sound financial management.[9]
It indicates the failure in budget adherence as a result of shortage of
capacity to implement infrastructure projects as planned. It stresses the
prevalence of high vacancy rates among senior personnel ranging from 30% to 70%
and that many of them are not properly qualified. The question may arise as to
how do the deficiency in capacity and skills impact on the overall vision of
developmental local government as envisaged in the White Paper?
As discussed, the main goal of developmental local
government was and has been improving the quality of lives of citizens at all
levels through the meeting of social, economic and material needs of the
communities. Basically this means the availability or better provision of the
basic services. With the deficiency in capacity, statics show an oblique
picture indicating that the vision is yet to be attained and that progress is
not as was envisaged. In particular, there are backlogs in the provision of
access to basic services. As acknowledged in the ANC Local Government Review Paper
(2010), the overall level of access to basic services of water, sanitation,
electricity and roads remained at 54%. Comparatively, the statistics were bad
in Limpopo with only 15% serviced, in Eastern Cape at 33%, North West at 38% and
Mpumalanga at 40%. The same reflects the aftereffects of the disparities of the
apartheid system. That manifests a non-fulfillment of the vision of
developmental local government which envisaged integration and redistribution
of development. Thus, the complete vision of the White Paper has not been
translated into reality on reason, among other problems, lack of capacity and
necessary skills.
The problem, therefore, of lack of capacity and skills has
been a challenge in the implementation of the vision of developmental local
government, albeit with some successes here and there. As indicated from the
little statistics above, there is a negative impact on the implementation of
the vision. Nevertheless, deliberate policy and legislative interactions were
put in place throughout the period to avert the problem. As a result the
problem has had an impact on the overall policy and legislation in an attempt
to implement the vision of developmental local government. These policy and
legislative measures are considered below.
3.2 Policy and
legislative measures to avert deficiency in capacity and requisite skills.
As the problem of capacity was there even at the time of
inception of the White Paper and continued thereafter, there has been a
deliberate policy attempt to deal with the deficiency in capacity and skills. Practical
directions were laid down through enactment of the Municipal Demarcation Act[10]
and the Municipal Structures Act.[11]
The passing of the Municipal Systems Act[12]
later in 2000 was a significant legislative measure against the problem of
capacity of Municipalities. It brought in the concept of performance management
which is directed towards improvement of performance of municipalities.[13]
Although that was the aim, staff in the municipalities remained mainly the same
was not very effective. Consequently, another policy intervention, Project Consolidate,
was put in place to address the problem of capacity. This aimed at supporting municipalities
lacking capacity and expertise to discharge their mandate and provide necessary
services. This was aided by the South Africa Development Bank Siyenza Manje
programme which had a similar approach of deploying human resource to
municipalities to address the capacity deficiency.[14]
Further, in 2006 the cabinet of the national government, through the Five Year
Strategic Agenda, acknowledged the problem of capacity, pointing out that there
was a mismatch between national policy objectives tracing their origin from the
White Paper and the capacity of municipalities to implement them. The agenda
therefore, partly aimed at resolving the problem of capacity. Finally, the
Turnaround Strategy of the Zuma administration also conceded the persistent
problem of capacity and laid down measures to deal with the challenge.[15]
From the above it can be surmised that poor capacity and
lack of necessary expertise has been a persistent problem negatively affecting
the realisation of the developmental local government dream. At the same time
the problem has had an influence on the direction of government policy in an
effort to realise the vision of developmental local government.
4. FINANCIAL
MISMANAGEMENT
4.1 The problem
A question importance of good financial management and how
does poor financial management impact on the implementation of the
developmental local government vision? The answer is well available in the
Local Government Budget and Expenditure Review[16]where
it states that the revenue and expenditure management capacity of a
municipality determines its ability to contribute to poverty reduction and
economic development. This is in the sense that any weakness in these areas is
likely to reflect the existence of other governance challenges in the
municipality
This paper considers this particular problem in a broader
perspective that includes the areas of revenue mobilisation, lack of
expenditure controls and proper prioritisation, abuse or disregard of law and
regulations on financial matters and the general financial management issues.
As was the case with the problem of lack of capacity, the problem of financial
management weakness was also there at the time of inception of the White Paper. It stated that some municipalities had
inadequate financial management capacity and as a result budgeting, accounting,
audit control and financial reporting systems were weak.[17]
It stated that the budget processes were not properly linked to municipal
planning and that in some cases revenue was overstated resulting to unrealistic
budgets. The problem is likely to persist until dealt with by policy and
legislation. That is the case as the problem is related to capacity and
expertise which cannot be dealt with in a short period of time. The problem has
persisted even up to the years of 2010/2011 and beyond. [18]
This has culminated into negative reports of audit in respect of many of the
municipalities in the 2010/2011 financial year. A few municipalities received a
clean audit with a number of municipalities having unauthorized, fruitless and
wasteful expenditure and poor revenue mobilisation may arise as to what is the[19]
. Thus, poor financial management would lead to the same
result as poor capacity does as observed in 3.1 above, thereby negatively
affecting the vision of developmental local government. To avert the continuity
of the problem necessary policy and legislative measures were put in place over
the years after inception of the White Paper. These are considered below.
4.2 Policy and
legislative measures to avert financial mismanagement.
Noting the negative impact the problem of municipal
financial mismanagement has had on the implementation process, attempts were
made to deal with the problem over the years. The most significant was the
enactment of the Local Government Municipal Systems Act of 2000. This Act was,
among other things, as stated in its long title, to provide for and ensure that
municipalities put in place service tariffs and credit control policies that
take the needs of municipalities into account by providing a framework for the
provision of services, service delivery agreements and municipal service
districts. The provisions of the Act also attempted to manage credit control
and debt management. In the words of Mettler,[20]local
governments were empowered to implement effective credit control and debt
collection strategies in dealing with non-payment for services while making
sure that the highly indigent receive relief.[21]
Clear provisions were made in Chapter 9 laying guidelines and permitting action
in managing debt. This is a policy and legislative reaction to poor revenue
mobilization and debt collection which as mentioned in the outset makes up
components of poor financial management.
Another legislative intervention on the problem of poor
financial management was the enactment of the Local Government: Municipal Finance
management Act 56 of 2006 which, as per section 2 thereof, had the objective of
securing sound and sustainable management of fiscal and financial affairs of
municipalities. The Act further sets up standards for inter alia, managing of
revenues, expenditure, assets and liabilities and the handling of financial
dealings. Additionally, it sought to regulate planning and budgetary issues and
supply chain management. This has been the major guide as far as financial
management in municipalities is concerned.
Also contributing to an attempt to address the poor
financial management in municipalities as broadly understood above, was the
legislative intervention on property rates which is a major source of revenue
for municipalities and was hitherto poorly managed as observed above. The problem of property rates management led
to the enactment of the Municipal Property Rates Act.[22]
The Act provides a broad framework to guide the municipalities in developing
policies suiting their needs. It further provide procedures on how rateable
property is to be valued, the criteria and the appeals process on any grievances
resulting from the valuation processes.
It should be noted that apart from legislative
interventions, general government policy has been set in a way aimed at addressing
the problem of financial mismanagement. This has been the case in the five year
strategies that have been laid down over the years; 2006-2012 and 2009-2014. In
the 2006-2012 agenda the problem was captured as financial viability under the
priority area number (v) of capacity building and hands on support. The
2009-2014 plans, however, did not clearly spell out the problem of financial
management but the priority areas outlined therein do have a bearing on the overall
financial management of municipalities.[23]In
addition to the above policy directions, the National Treasury issued regulations
for municipal competency levels.[24]
These regulations laid down the minimum requirements for accounting officers,
senior managers, financial officers and other officials responsible for supply
chain management of municipalities. This is in consonance with sections 83, 107
and 119 of the Municipal Finance Management Act which require officials to meet
prescribed competency levels in finance and supply chain management. All this
was a deliberate effort to deal with the persistent problem of poor financial
management in municipalities.
In practice, therefore, problem of financial mismanagement
has influenced the overall direction of government policy and legislation in a
quest of implementation of the White paper vision tabulated in the concept of
developmental local government. It is also worth noting that this problem of
poor financial management is related and cannot be divorced from the other
problem of capacity and competency of the municipalities. The poor the capacity
and skills base of a municipality the poor the financial management outlook,
and the converse being true. Thus, both of these problems have had a negative
simulation on the vision of developmental local government.
5 CONCLUSION
In conclusion, it is justifiable to say that although the
vision of the White Paper in the form of developmental local government has
seen fulfillment in some developmental aspects, there have been persistent
challenges since its inception. There
are a number of such challenges but the lack of capacity and relevant skills as
well as poor financial management are the major problems that have persisted
throughout. As discussed in this paper earlier on, they have had a negative impact
on the realization of the vision of developmental local government and in the
process have further influenced the direction of national policy and
legislation in an effort to counteract them.
BIBLIOGRAPHY
Statutes and Regulations
Local
Government: Municipal Demarcation Act 27 of 1998
Local
Government; Municipal finance Management Act 56 of 2003
Local
Government: Municipal Finance Management Act, 2003; Municipal Regulations on
Minimum Competency Levels.
Local
Government: Municipal property rates Act 6 of 2004
Local
Government: Municipal Structures Act 117 of 1998
Local
Government: Municipal Systems Act 32 of 2000
Articles and reports
Developmental local Government: Determining
Appropriate Functions and Powers 2007, Community Law Centre, UWC.
Mettler J Municipal Systems Bill: Erecting the Third Pillar. Local Government
Bulletin Vol 1 No 9 September 1999
Powell D Imperfect Transition: Local Government Policy Reforms in South Africa,
1994-2012(Unpublished)
Steytler N & De Visser J Local Government Law of South Africa
(2011) Durban: LexisNexis
Reports and Policy Papers
Five Year Strategic plan 2009-2014, 2009
CoGTA
Guidelines for Municipal Competency Levels:
Financial officials at Middle Management levels 2007, National Treasury.
Local Government Budget and expenditure
Review (2006/07-2010/11, National Treasury.
Provincial and Local Government Review
Discussion Paper 2010, ANC legislative & Governance
NEC Sub-committee.
Review of the White Paper on Local
government 2007, GGLN
State of local Government in South Africa
2009, CoGTA
The White Paper on Local Government 1998,
MPA&CD
Turnaround Strategy 2009, CoGTA
[1]
Steytler & de Visser Local Government
Law of South Africa Issue 4 ( 2011) 1-10
[2]
White Paper on Local Government 1998.44
[3]
Section A Para 1
[4]
Section A Para 2.3
[5]
Section A Para 4.1
[6]
Local Government Budget and Expenditure Review 2006/07-2010/11. 110
[7]
Provincial and Local Government Review Discussion paper 2010. ANC Legislature
& Governance NEC Sub-Committee. 13.
[8]
Provincial and Local Government Review Discussion paper 2010
[9]
Review of the White Paper on Local government 2007. GGLN
[10]
Local Government: Municipal Demarcation Act 27 0f 1998
[11]
Local Government: Municipal Structures Act 117 1998
[12]
Local Government Municipal Systems Act 32 of 2000
[13]
Local Government Bulletin Vol 1 No 9 (September 1999) 3
[14]
Powell D. Imperfect Transition: Local Government Policy Reforms in South Africa
1994-2012,2012
[15]
Turnaround strategy 2009. CoGTA
[16]
2006/07-2010/11
[17] Para
2.2 of the section A
[18]
GGLN Review of White Paper 2007 13 and ANC NEC Provincial & Local Government
Review Discussion Paper 2010.17
[19]
Powell D 2012
[20]
Local Government Bulletin Vol 1 No 9 September 1999 3
[21]
Vide sections 95-104 of the Systems Act.
[22]
Act 6 of 2004
[23]
Five Year Strategic Plan 2009-2014. CoGTA
[24]Local
Government: Municipal Finance Management Act, 2003; Municipal Regulations on
Minimum Competency Levels. For practical
purposes the National Treasury issued guidelines on the required levels of
competency e.g., Guidelines for Municipal Competency Levels: Financial
Officials at Middle Management Level.2007.
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