Minister Thembi Nkadimeng has today led the Department of Cooperative Governance in a briefing to the Standing Committee on Appropriations on the Adjustments Appropriation Bill. The focus of the briefing included critical areas, such as the impact of the reduction in the Local Government Equitable Share (LGES), financial performance of the Municipal Infrastructure Grant, strengthening institutional capacity, steps to settle Eskom debt by municipalities, support and interventions to improve resource mobilization, disaster expenditure by municipalities, addressing issues/challenges in expediting disbursements and capacitating municipalities, and progress in the professionalization of Local Government.
The Department continues to actively address the multifaceted challenges faced by municipalities, recognizing that financial distress often stems from a complex interplay of political, governance, administrative, financial management, and service delivery issues. In response to these challenges, the Department has undertaken comprehensive measures to support municipalities, including the development and implementation of Municipal Support and Improvement Plans (MSIPs).
The primary purpose of MSIP is to identify actions to be undertaken by all stakeholders across all spheres that will be targeted and impactful to effectively respond to and eliminate challenges currently pervasive in municipalities.
The Department is further supporting 22 municipalities with a specific focus on increasing revenue and reducing outstanding debts. This approach mirrors successful strategies implemented in addressing indebtedness to entities such as Eskom.
As of 12 November 2023, 36 municipal applications for debt relief have been approved by the National Treasury. Considering the continuing cash flow constraints impacting municipalities’ ability to settle their creditors, the department is actively implementing a series of projects aimed at improving the financial positions and, consequently, the financial sustainability of the approved municipalities.
Other key initiatives currently being undertaken by the Department include:
• Support to Increase Municipality Revenue
• Support to Decrease Debt Owed to Municipalities
• Support on Data (Revenue) Management
• Technical Assistance on Cost of Supply (COS) Studies on Water.
These initiatives highlight some of the Department’s commitment to addressing the financial challenges faced by municipalities and facilitating their sustainable development. By providing targeted support and implementing strategic interventions, the Department aims to ensure the improved financial positions of municipalities and the timely settlement of their debts, including those owed to Eskom.
The Department further discussed various support programs and plans in place to assist struggling municipalities, including young graduates programs, capacity building, and disaster recovery grants.
For media enquiries, kindly contact:
Mr. Legadima Leso: 066 479 9904
Mr. Tsekiso Machike: 078 237 3900
Issued by the Ministry of Cooperative Governance and Traditional Affairs (CoGTA)