Minister Dr Nkosazana Dlamini Zuma

Minister Dr Nkosazana Dlamini Zuma’s Opening Remarks to the Ethekwini Municipal Council

Honourable Speaker
Her Worship , The Acting Mayor: Ms, Fawzia Peer
The Honourable Councillors
City Manager
Deputy City Managers and Heads of Departments
And Officials from the National and Provincial Departments,

We could go on and on about the achievements of this great city and gateway to the East and the world, but it is common knowledge that this city and many other municipalities in KZN and the country are facing many challenges. Ours is to ensure that we visit all those that are troubled and those that are successful so that we may gather first hand of the successes and challenges.

This task we undertake together with yourselves and the provincial government as envisaged by the Constitution, especially section 154, which calls on all of us especially national and provincial government to “support and strengthen the capacity of municipalities to manage their own affairs”. Our journey here today is one of exploration, towards a common understanding of the gains, challenges and capacity constraints facing this great city.

We come in peace!!!
This visit is actually part of a broader assessment that we have undertaken to develop a comprehensive analysis of the state of this and the other 53 municipalities in the province of KwaZulu-Natal. We believe that the learnings from this municipality can help us to drive the development of other municipalities.
The baseline will assists us not only to identify the specific challenges, impacting on the stability and functionality of the municipalities, but to also identify new opportunities and innovations in delivering services to the communities.

We all know that local government is the most important sphere of government because of its close proximity to the people. This means that is has to be best supported by national and provincial governments to deliver on its mandate effectively and efficiently. For government to effectively deliver services, local government must function optimally. However, our assessment of local government tells us that there are challenges facing municipalities across the country, and these need to be attended to immediately. Currently, we have the North West Province which is under section 100 administration, which intervention started last year and should hopefully end soon. There are also 40 Municipalities that are currently under section 139 administration, and many more that are dysfunctional or struggling. 10 of the 40 municipalities are here in KZN.

The challenges are mainly in the areas of governance and financial management, Supply chain management, Legal, Town and Regional Planning, Evaluation. For example according to the auditor general’s report, only 55 Municipalities have at least one engineer.
In making his findings in the 2017/18 report, The Auditor General found the following about the finances of our municipalities.
– 8 % unqualified without findings
– 39 % unqualified with findings
– 30% Qualified audit outcomes
– 4% had Adverse with Findings
– 10% had disclaimers
– 9% have audits that are still outstanding

It is also true that some of the problems of municipalities are structural. The introduction of wall to wall municipalities extended service delivery to previously neglected communities. This added to the financial obligations of these municipalities without necessarily improving their capacity to raise their own revenue. Therefore as we find solutions to problems facing municipalities in general, we must also look at the funding model, including the equitable share formula.
EThekwini municipality has indeed made significant gains in expanding access to services for the majority of our people. Despite these gains, there are significant challenges that need to be addressed for the municipality to regain its growth momentum.

On the 30 of January 2019, the AG reported to this council on the findings, she called for more effective leadership, oversight responsibility and the need for stricter compliance monitoring. With respect to non-compliance, irregular expenditure…reasonable steps were not taken to prevent expenditure of 731 Million. She further said the majority of the irregular expenditure was a result of non-compliance with supply chain regulations.
This led to the AG giving the metro an unqualified report with findings. Which means that together we must find ways to improve collection on services rendered by the municipality, the metro cannot afford to continue to write off bad debt of 4.3 billion is very high.

We need to intensify the war on leaks and illegal connections, which has led to the R 740 million revenue loss due to water losses of 105million Kilo-litres.
The Department is currently positioning itself to respond to the challenges that are facing local government, mainly on the priority of delivering basic services. In the main, the key challenges that are still evident in our municipalities revolve around poor governance and financial management system which hamper the functionality of our local government sphere.
We want to ensure that no local government requires section 139 in order to do what it needs to do – providing services to residents, instead we will focus our efforts on enhancing a system of cooperative governance, which can be done through the implementation an Intergovernmental Relations Framework, whose principles are enshrined in section 154 of the constitution.
Our primary objective in this model is to ensure better service delivery, which will benefit our communities and improve the lives of all South Africans.
Therefore, our response to the challenges of local government will be packaged in a set of priorities that we believe will be fundamental to an effective turnaround of the local government by building their capacity to improve Governance structures, Financial Management, and Supply Chain Management.
These priorities summarised as follows:
• Institutional Development, Governance and Citizens Engagement
• Institutional Sustainability (Policy Review on the Wall – to – wall Local Government, Powers and Functions, Funding Model)
• Water and Bulk Infrastructure, and maintenance thereof.
• Service Delivery and Job Creation
• Strengthen Cooperative Governance (IGR – Lateral and Vertical Integration)
• Disaster Risk Reduction and Management
• Integrated Planning for Spatial Transformation and Inclusive Economic Development

We will be implementing these priorities in the short term during the 2019/20 financial year, but also these will form the basis of the new 2019-2024 Strategic Plan of the Department to implement service delivery through the district model. Part of the plan will be to strengthen the Municipal Infrastructure Support Agent (MISA) to also help build the human resource and funding capacity of municipalities. As part of that capacity building, MISA should train young people to provide and maintain municipal infrastructure. We are in discussion with the School of government to identify the areas where municipalities are failing and to develop relevant training programme(s)

We are all here with a single purpose in mind, which is to ensure the success of the metro to deliver services to all residents. Working together the city can and will live up to its vision of a caring and liveable city.
We must therefore look beyond our current constraints and assume a long term and sustainable vision, which vision must take advantage of all our resources to make the city a better place to live, work and play in. The city still has an opportunity to play a major role in contributing to the growth of the economy of the country, especially in the Oceans Economy where you have a competitive advantage.

And we can assure you of our commitment to make the other spheres of government available to support the council, and the municipality to deliver predictable and reliable services to the people of this beautiful city.
I Thank You, and wish you a successful council meeting!