Do municipality rankings reflect the sentiments on the ground?

Despite its financial difficulties and much-publicized service delivery woes, Newcastle Municipality has been rated number six in the country in a Good Governance Africa survey.

The research and advocacy non-profit agency evaluates municipalities according to four categories, administration and governance, leadership and management, planning, monitoring and evaluation and service delivery, with service delivery weighing more in importance.

According to their Governance Performance Index (GPI) report Newcastle was ranked 6th out of 19 secondary cities and 16 out of 43 municipalities in KZN.

The finding has been hailed by Newcastle Mayor, Xolani Dube, and municipal manager Zamani Mcineka.

“Strangely, as much as the municipality is not doing well (financially), we are performing in terms of good governance in the province,” Mcineka said.

The core inputs of the GPI report include the Auditor General of South Africa’s annual MFMA reports and the Department of Water and Sanitation’s Blue Drop, Green Drop and No Drop reports.

General sentiment on the streets of Newcastle appears to be directly at odds with the GPI report with a general growing discontent with the town’s condition and the Newcastle municipality.

 Noted one concerned resident: “Service delivery is non-existent in this town. Sewerage flows in the streets, there are water outages, the grass is hardly being cut, and the town is filthy. Just go to social media and you’ll find people pleading with the municipality to restore water in their areas.”

More in line with residents’ feelings is a damning report released by Ratings Afrika, a governance ratings agency,  That named Newcastle as one of the lowest-ranking municipalities – putting it in fifth spot out of 112 municipalities evaluated. Newcastle scored a mere 15 out of 100 in the agency’s Municipal Financial Sustainability Index (MFSI).

In its MFSI, Ratings Afrika evaluates six financial components (of a municipality): the operating performance, liquidity management, debt governance, budget practices, affordability and infrastructure development of a municipality.

Expounding on the lowest scoring municipalities the report states:

“Unfortunately there are municipalities that reflect extremely low on financial stability and they are a cause for grave concern as service delivery is normally affected adversely by financial constraints.

“A common feature of the municipalities with the lowest scores is that their liquidity positions are extremely weak. Their operating revenue and expenditures are not evenly matched, resulting in relatively large operating deficits. The quality of their infrastructure is deteriorating, caused by low spending on repairs and maintenance which could threaten long term service delivery and sustainability.”

The MFSI goes on to note that the practical realities are that these municipalities do not have cash available to pay their service providers such as Eskom, water utilities and other creditors within 30 days as required by the Municipal Finance Management Act (MFMA) which makes it impossible for the municipality to provide an acceptable level of services.

This, coupled, with the low average collection rates leads to cash shortfalls, a situation not expected to improve as most municipalities are expected to continue to realise losses due to continued low collection rates and slow economic growth.

Ratings Afrika notes that since it first published the MFSI in 2011, the financial sustainability of South African municipalities has deteriorated dramatically.

“Residents and businesses are suffering from poor, and in some cases almost non-existent, service delivery. The economic growth of towns is threatened by the inability to maintain and develop infrastructure. A most important additional point Eskom and water utilities are dependent on municipal payments to remain viable themselves,” the report said.

In conclusion, the MFSI stressed that unless a concerted effort is made by municipalities themselves to strengthen their governance and financial management, this bleak situation will continue, service delivery will break down even further, the quality of life for most residents will deteriorate and economic activity will be stifled.

The news provided to you in this link has been investigated and compiled by the editorial staff of the Newcastle Advertiser, a sold newspaper distributed in the Newcastle area. Please follow us on Youtube and feel free to like, comment, and subscribe. For more local news, visit our webpage, follow us on Facebook and Twitter, and request an add on our WhatsApp (082 874 5550).