Plans for the most dysfunctional municipalities in South Africa

While South Africa finds itself at a point of great uncertainty, the country is also at a time of great opportunity that will require tough decisions to be made, says Finance Minister Enoch Godongwana.

On Wednesday (18 May) the minister made the appeal as he pronounced his first vote on the budget in Parliament.

In his speech, Godongwana said: “The moment demands that we stick to the political path of balancing support for the most vulnerable families, with the careful rehabilitation of our public finances.”

Over the next year, he said the National Treasury will continue to support the government’s ability to “ensure stable and sustainable growth and an equitable and efficient allocation of public resources.”

He said the department will continue to pursue a balanced and prudent fiscal strategy in order to stabilize public finances.

“Although public finances remain under pressure, the fiscal position has improved slightly from this period last year. We cannot let our guard down as we continue to restore the health of public finances.

“To this end, recommendations resulting from spending reviews will be implemented to improve spending efficiency and the impact of program delivery in the medium term. The National Treasury is sensitive to our changing environment and continuously considers improvements to the budget process to fulfill our national priorities and anticipate future needs, “she said.

He said work is underway on climate labeling and climate balance labeling, which is a tool for monitoring and tracking climate-related expenditure in the national budget system.

It provides comprehensive data on climate-related spending, enabling the government to make informed decisions and prioritize climate investments.

The local government

Although national economic growth is anchored in strong local economies that depend on effective local government, he said the country is struggling with the formidable challenge of a growing number of dysfunctional and financially struggling municipalities.

To reverse the trend, he said the National Treasury, in partnership with the Department for Cooperative Governance (DCOG), is leveraging local government support mechanisms to step up targeted interventions for greater impact from the broad capacity building underneath. the general accountant.

This will include programs to improve municipal audit results with a specific focus on those with the highest levels of irregular, unsuccessful and wasteful direct intervention spending under Article 139 (7) of the Constitution.

“There are 43 municipalities that meet the criteria to be placed under the obligation to intervene. I have already written to the Premier of all the provinces in October last year identifying these municipalities and that the mandatory intervention process must begin in earnest, “she said.

Bringing municipalities back to financial health would increase residents’ quality of life, encourage economic activity and investment, as well as encourage the payment of taxes and rates, he said.

Advancing by including growth and realizing transformation

During the financial year 2022/23, the National Treasury, in partnership with the local government, will implement five township economic development strategies, as well as identify and approve 20 catalytic projects in spatially targeted areas within metropolitan cities.

Second, he said the strategies will be implemented in cities and rural countries to provide technical support to strengthen infrastructure planning, delivery capacity and to support spatial transformation and inclusive developments.

Renew trust in public bodies

The minister said the government will continue to finance gross funding needs during the financial year while minimizing refinancing risk, foreign exchange risk and overall borrowing costs.

To reduce their continuing demands on South African public resources, Godogwana said the National Treasury will outline the criteria for government funding of SOCs.

“Eskom faces a large amount of debt which remains a challenge for unassisted service. The National Treasury is working on a sustainable solution to address Eskom’s debt fairly and fairly vis-à-vis all stakeholders. Work on overhauling the governance systems of several high-risk state entities is ongoing, “she said.

Strengthen our commitment to ethical governance

The minister said that strengthening the transparency, efficiency, effectiveness and impact of public procurement remains a “priority” for the national treasury.

This, he said, will be achieved by introducing the long-awaited public procurement bill, strengthening accountability and management of procurement decision-making across all public departments and institutions, and most importantly, by modernizing the procurement system.

This would strengthen data collection and improve analytics by enabling better reporting and consequently increasing monitoring by both government and public parties.

“We have received over 4,000 requests on the revision of the public procurement law and these have all been considered along with the recommendations of several recent committees of inquiry,” he said.

In this regard, consultations with Nedlac began on May 6, 2022 as the bill moves towards presentation in Parliament this financial year.

“Work is continuing apace on the reforms and support measures of the PFMA and MFMA, as well as on accelerating the implementation of the government’s integrated financial management system with the launch of modules in both pilot departments and provinces. ‘year.

“In addition to strengthening the legislative frameworks, capacity, capabilities, systems and processes of governance and financial management, the National Treasury will continue to play our role in the fight against corruption and maladministration by conducting forensic audits, special performance audits and review of internal controls, “he said.

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