Lack of skills, experience weaken SA's municipalities

René Vollgraaff

Business LIVE, 18 February 2012

 

Lack of management experience and skills threatens the financial sustainability of many municipalities, according to the latest Ratings Afrika Municipal Financial Sustainability Index released this week.

 

Leon Claassen, an analyst at Ratings Afrika, said, "At some municipalities there might be good management, but the political leadership will force them to make certain decisions to score political points. This leads to the implementation of decisions that are not well thought through, and it damages the financial position of municipalities.

 

A report released by the Treasury last month, cited underspending of capital budgets and overspending of operational budgets as reasons for service delivery deteriorating.

 

At the Kouga municipality, stretching from Van Stadens River to Tsitsikamma River and including Jeffreys Bay, 67.4% of spending was on staff costs, and only 6% on maintenance. Kouga was the Eastern Cape's worst-performing municipality.

 

Claassen said exorbitant pay for mayors or municipal mayors often made a municipality's staff costs rise faster than its income.

 

Another contributor to fast-rising staff costs was when a municipality saw itself as a primary job creator, employing more and more people, leading to rising costs and deterioration in service. Click here to read more