Finance minister Tito Mboweni says that the Treasury is increasingly being asked to intervene in the financial affairs of municipalities across South Africa as they are unable to provide basic services.
Responding in a written parliamentary Q&A, Mboweni said that a court action was brought by Astral Foods Limited compelling the National Treasury to prepare a financial recovery plan for the Lekwa local municipality in Mpumalanga.
The court order issued on 12 April 2021 allows for a period of six months from the date of the order; however, the financial recovery plan will be prepared in terms of the timeframes in the Municipal Finance Management Act.
Mboweni added that there are now similar court applications which Treasury is dealing with across South Africa, with at least six other municipalities facing calls for intervention.
Emalahleni Local Municipality in Mpumalanga
A High Court application brought by Save Emalahleni Action Group and others to compel the province to invoke a mandatory intervention in the municipality.
An order by consent of all parties was granted by the court for the mandatory intervention.
If the province fails to comply with statutory provisions relating to mandatory intervention and if the applicants intend to review any decision the applicants may enrol the matter file supplementary papers seeking appropriate relief which might possibly also include national intervention in terms of section 139(7) of the Constitution.
Enoch Mgijima Local Municipality in the Eastern Cape
A High Court application brought by Let’s talk Komani against the Premier and Others seeking a mandatory intervention in terms of section 139 of the Constitution.
An order by consent of all parties was granted by the court to the effect that the financial recovery plan approved by the province was made an order of court.
The province reports quarterly to the High Court on progress on the implementation of the financial recovery plan.
Makana Local Municipality in the Eastern Cape
A High Court application was brought by the Unemployed Peoples Movement against the Premier of the Eastern Cape and Others seeking a mandatory intervention by the province into the Makana Local Municipality, the dissolution of the municipal council, and the appointment of an administrator.
Kannaland Local Municipality in the Western Cape
A High Court application brought by the municipality against the provincial government for judicial review of decisions of the provincial executive to intervene in the municipality, claiming that the financial recovery plan of March 2017 and appointment of administrators was unlawful and unconstitutional.
Maluti-A-Phofung Local Municipality in Free State province
A High Court application which was brought by Harrismith Business Forum to interdict Eskom from discontinuing electricity supply to Maluti-A-Phofung municipality and to compel national government to intervene in terms of section 139(7) of the Constitution.
An order by consent of all parties was granted by the court to, amongst others, establish a consultative committee chaired by the Minister of Cooperative Governance and Traditional Affairs and prepare a financial recovery plan.
Mafube Local Municipality in Free State province
A High Court application brought by Mafube Business Forum and Afriforum seeking a declaration that the provincial intervention has failed and jurisdictional facts for national intervention in terms of section 139(7) of the Constitution are present.
Commenting on the Astrals Food case this week, deputy finance minister David Masondo said that while the case may be the first of its kind, it was likely to set a precedent for other communities who have had their fair share of poor service delivery and ‘general municipal ineptness’.
“Lekwa is not the only municipality to have failed in terms of the constitutional and developmental mandate assigned to local government.
“Regrettably, 25 years into a new local government dispensation, after the introduction of progressive and enabling municipal legislation, extensive capacity-building efforts and increased grant allocations, there are 39 other municipalities in a situation as critical as Lekwa.”
There are also 163 municipalities in financial distress and 108 municipalities that have passed an unfunded budget in 2020/21 financial year, Masondo said.
“The crisis at Lekwa is unfortunate. Even more unfortunate, is that being ordered by the High Court to intervene goes against the very essence of our cooperative intergovernmental system.
“But in any crisis, there are also opportunities. Opportunities to redefine what is acceptable and what is not, opportunities to remind ourselves of our duty to serve, opportunities that force us to rethink our approach.”