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South Africa: 24 Municipalities Now Under Administration

Since October 2016, 24 municipalities were positioned under management, with 13 of those being positioned under management since June.

This is in line with the Department of Cooperative Governance and Traditional Affairs (Cogta), which supplied an replace of municipalities positioned under management to Information24 closing week.

The causes supplied via Cogta paint an image of municipalities that experience collapsed and are crippled via monetary mismanagement. The causes vary from deficient – on occasion illegal – monetary control; unspent finances and an incapacity to assemble earnings; spiralling debt and collapsing infrastructure, and governance disasters stemming from dysfunctional councils.

In his finances vote speech in Parliament in May, Cogta Minister Zweli Mkhize mentioned 11 municipalities had been under management. Six of the ones had been in KwaZulu-Natal; two within the Free State; and one each and every within the Eastern Cape and the Western Cape.

Mkhize mentioned that 87 municipalities from across the nation, abroad’s 257 municipalities, had been “dysfunctional or distressed”. Mkhize mentioned 14 groups could be dispatched to take care of problems dealing with municipalities, and Cogta and Treasury would paintings in combination to ascertain a joint technical intervention team.

According to the newest listing, 8 municipalities, they all within the North West, had been positioned under management firstly of September. There at the moment are seven municipalities under management in KwaZulu-Natal, 3 each and every within the Free State and the Eastern Cape, and one each and every within the Western Cape, Limpopo and Gauteng.

Two of the collapsed municipalities on Cogta’s listing, each from the North West, characteristic within the Reserve Bank’s record into wide-scale looting at VBS Mutual Bank.

7 extra municipalities at the breaking point

The Mahikeng municipality was once positioned under management on September 1, in part as it “illegally” invested R85m in VBS. According to Cogta, this comprises R60.1m “erroneously” paid via the dep., which the municipality is now refusing to pay again.

While the Kagisano local municipality didn’t spend money on VBS, it falls under Dr Ruth S Mompati municipality, which invested R101m within the failed financial institution, in line with the Reserve Bank’s record.

According to the Mail & Guardian, seven extra municipalities in Limpopo could be positioned under management as a result of the cave in of VBS. They are reportedly on the point of insolvency.

Cogta spokesperson Musa Zondi informed Information24 that the surprising upward push within the collection of municipalities under management was once because of a mix of 2 issues: a regression within the efficiency of a few municipalities and an “interventionist approach” via Mkhize.

He mentioned there was once a “worrying trend” of municipalities that had been suffering to pay salaries, such because the West Rand municipality. It isn’t under management, however invested over R77m in VBS, in line with the Reserve Bank record.

In those instances, Zondi mentioned there have been issues “for some time” which have been exacerbated via the truth that they invested cash they didn’t have in VBS. He mentioned the dep. had despatched in groups of engineers or mavens to help municipalities gather monies correctly. He mentioned the extra competitive interventions in municipalities had been knowledgeable via the truth that the rustic’s financial system would no longer paintings if its local municipalities don’t paintings.

Source: Information24

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