Semi-gration to the Top30 Local Municipalities - Better Management & Maintenance Attracts Investment

A semi-gration trend to the Western Cape property market has been detected by Property Practitioners and confirmed during the last 5 years by statistics from the data analytics group, Lightstone.

There has been a substantial increase of especially Gauteng homeowners (and during the last year also Kwazulu-Natal) homeowners moving from metropolitan areas to smaller and larger towns or Cape Town. It can mostly be attributed to a move away from crime-and-grime and towards a slower, safer, quality lifestyle in the small to large towns - but also since municipalities are typically better run in the Western Cape than in other parts of South Africa.

Seven of the top 10, and 18 of the top 30 municipalities, are in the Western Cape Province.

According to Government Performance Index (GPI), the lowest ranking (135th) Western Cape local municipality was in 2021 Beaufort West - managed by an ANC/KDF coalition.

The GPI is a ranking instrument that provides all interested stakeholders with an index of municipal-level governance performance. Ultimately, local government is the level at which governance most directly impacts people's lives through rigorous planning, adequate service delivery, maintaining infrastructure and proper financial management.

The GPI ranks 205 local municipalities and eight metropolitan municipalities.

The rest of the Western Cape local municipalities were all under the top 100:

Knysna (61st) - ANC/COPE/ACDP/KUC coalition

Theewaterskloof (45th) - DA

Stellenbosch (44th) - DA

Matzikama (40th) - DA

Oudtshoorn (34th) - DA

George (30th) - DA

Swartland (27th) - DA

Mossel Bay (26th) - DA

Langeberg (24th) - DA

Laingsburg (23rd) - DA

Hessequa (20th) - DA/VF+ coalition

Cederberg (19th) - ANC

Breede Valley (18th) - DA

Witzenberg (17th) - DA

Drakenstein (14th) - DA

Kannaland (11th) - DA

Bitou (8th) - DA

Overstrand (7th) - DA

Swellendam (6th) - DA

Prince Albert (5th) - DA

Saldanha (3rd) - DA

Bergrivier (2nd) - DA

Cape Agulhas (1st) - DA

The City of Cape Town has been ranked first in the metropolitan municipalities due to its performance in the service delivery and planning and monitoring categories. Tswane (2nd), Johannesburg (3rd), Mandela Bay (4th) and Mangaung (5th) fills the rest of the top 5 metropolitan municipalities spots.

For a more detailed report, please follow the link the complete 2021 GPIndex : https://digitalmallblobstorage.blob.core.windows.net/wp-content/2021/10/Governance_Performance_Index_ZAR_2021.pdf

According to the Zondo Commission, the appointment and removal of board members and senior executives in state-owned enterprises was one of the key causes of state capture. It is such a pity that the Zondo Commission's mandate did not include "local government capture" and corruption - as 93,9% of all municipalities has been negatively rated by the latest Auditor-General's report as either high risk and dysfunctional (24,9%), OR as at medium risk (69%).

Most local municipalities in South Africa are not delivering on their constitutional mandate and many are on the brink of collapse, undermining the promise of a better life for all. The need for a mechanism to hold local governments to account has never been stronger.

Aging infrastructure, poor maintenance regimes, excessive numbers of potholes, rampant corruption, poorly maintained pedestrian walkways, leaking water mains and sewers, collapsing water treatment plants, electricity shutdowns, crime, and grime, failing substations, cable theft - all of which result in the loss of trading income for also commercial property owners - is the order of the day.

An unsustainable property rates regime is further compounding the problem. Property owners pay for the services above but very seldom are these services delivered adequately or even delivered at all.

The recent report on local government by the Auditor General, Tsakani Maluleke, is a timely reminder of the prevailing dysfunction in municipalities across the country, and the catastrophic impact that is having on all South Africans. The Auditor General is right to lay the blame squarely on the shoulders of municipal leaders, says Parmi Natesan, CEO, Institute of Directors in South Africa (IoDSA)-but perhaps we also need to be talking about professionalising municipal management as well. As we seem to be entering a period of unstable municipal coalitions that could make the council's leadership role even less effective, building up a cadre of professional municipal officials who have current and relevant skills, and who can be held to account rapidly via a professional code of conduct might something to seriously consider at this point.

According to the Auditor General's report, of the 257 local authorities, only 16 were in good financial health and only 27 received clean audits. This means that only 6% of municipalities were considered financially sustainable and only 10% were considered adequately managed from a financial perspective i.e., a staggering 84% of local administrations are either non-compliant with the minimum standards of fiduciary management and/or financially unsustainable.

Data shows that only 4 municipalities (1.5%) in the 2018/2019 financial year spent their allocated infrastructure budgets, 88 municipalities spent 1% and 8% of their allocated budgets on repairs and maintenance, while 112 spent nothing. Furthermore, 24.9% of municipalities have been rated as high risk and dysfunctional, 69% at medium risk, and a feeble 5.5% have been rated as stable.

Just 28% of municipalities submitted quality financials for audit purposes - and only 11% received clean audits. The extent of the problem is alarming, irregular, unauthorised, fruitless, and wasteful expenditure amounted to R189 billion.

Service Delivery

Given the prominence it holds within the mandate and responsibilities of local municipalities, Service Delivery was the category the GPI weighted as most important within their ranking system. Some of the main factors affecting service delivery performance include access to piped water, flush toilet connected to sewerage, access to electricity and weekly refuse removal.

While households in all municipalities have access to electricity to various extents, only in less than a quarter of municipalities do at least 95% of households have access to electricity. In 106 of the 205 local municipalities at least 50% of households have access to weekly refuse removal, implying that most households in about half of the local municipalities do not have regular access to basic services such as weekly refuse removal. Only in a quarter of the local government municipalities do over 50% of households have access to piped water within the building in which they live. It is also important to consider how municipalities are performing in terms of their mandate to provide free basic services to households identified as indigent, an essential responsibility in ensuring that poor and disadvantaged households have access to basic services which can help improve their living standards. In this regard, at least half of all local municipalities are providing help to 100% of indigent households with access to adequate water, electricity, sewerage systems and refuse removal.