Most SA municipalities facing collapse due to financial mismanagement

Most SA municipalities facing collapse due to financial mismanagement

- A new report suggests that most municipalities are being seriously mismanaged

- The study found that many are facing financial collapse

- However, the report also concluded that municipalities could improve dramatically with the right changes implemented

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Ratings Afrika's latest Municipal Financial Sustainability Index says that South Africa's municipal sector is under serious threat.

One municipality scored a shocking 2 out of 100 in its rating.

The report found that several municipalities were on the verge of collapse due to serious financial mismanagement.

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Additionally, the report analysed seven metros to determine their levels of good governance. Cape Town came first, while Johannesburg was ranked last.

Tshwane was also struggling, but showed improvement compared to previous years. 

The highest-rated municipality was Swartland in the Western Cape, which earned a score of 86. Notably, Swartland receive a score in the 50s as recently as 2012, showing that improvement is possible.

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In Swartland's case, the municipality improved by reducing expenses, improving revenue collection and making use of proper budgeting, according to The Citizen. 

To address these problems, Ratings Afrika said municipalities need to take action against corruption, impose financial discipline, work within strict budgets and appoint employees with the necessary skills and experience.

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According to the report, poor financial management was mostly due to a lack of skilled personnel in municipal management positions. 

Ratings Afrika also pointed out that municipal governance was essential to service delivery, meaning that communities would continue to struggle until their municipalities addressed their internal shortcomings, Briefly.co.za learned.

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Source: Briefly.co.za

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