Local governments are the engine rooms of a functioning province

Honourable Speaker, 

Local governments are the engine rooms of any functioning province. They maintain our sanitation services, and keep our neighbourhoods clean. They are responsible for law enforcement, and for creating an enabling environment for job creation and businesses to prosper. 

Yet when political instability takes hold, it can bring once thriving municipalities to its knees.  

In the Western Cape, we have seen how coalition chaos driven by opportunistic politicians have resulted in a revolving door of executive leadership, administrative chaos, and a lack of cohesive oversight.

Coalitions require maturity, compromise, cooperation, patience, and a shared vision. But in recent years, we have seen how municipalities' finances have been gutted at the altar of narrow political interests, instead of the interests of the people. We have seen how well run municipalities, with strong financial indicators and a solid history of delivery, completely collapse. 

AUDITS

Honourable Speaker, we often hear the phrase, “The people cannot eat a clean audit.” This dismissive rhetoric ignores the value of financial accountability.

A clean audit is not about handing out gold stars. It’s about telling people what you spent their money on. It is about attracting business and investment, creating jobs, and delivering services in communities. 

In the 2023/24 financial year, 26 out of our 30 municipalities secured unqualified audit opinions, with 20 achieving clean audits. These results are a testament to the importance of stable political leadership in local governments. However, municipalities like Kannaland which received a disclaimer and Laingsburg which received an adverse finding continue to fall short and demonstrate systemic challenges in regards to political volatility and poor financial controls. 

Honourable Speaker, it is true, the people can’t eat a clean audit. But they also can’t eat financial mismanagement, corruption, or theft. Poor audit outcomes directly translates into delayed projects, crumbling infrastructure, and disrupted services, the consequences of which affect our most vulnerable residents the hardest. 

ESKOM DEBT

The financial challenges in local government are further compounded by the collective R93.1 million owed to Eskom by 5 municipalities in the province. While some of the debt has been written off, this debt still remains an area that requires careful oversight.

The Eskom debt incurred by Theewaterskloof, Matzikama, Cederberg, Beaufort West and Kannaland all stem from coalition chaos in those municipalities at some point or another. 

Matzikama, Cederberg, Beaufort West, and Kannaland are all currently under payment plans supported by National Treasury’s debt relief scheme, except Theewaterskloof, whose R50 million debt arose after the 31 March 2023 cut-off. Theewaterskloof’s mayor has rightly attributed these financial woes to a lack of political oversight under the previous coalition administration.

PROVINCIAL TREASURY INTERVENTIONS 

Despite these challenges, the Provincial Treasury remains committed to supporting distressed municipalities.

In Beaufort West, progress under the Financial Recovery Plan allowed the municipality to move to Phase 2, following:

• A revenue collection rate of 85%,
• Compliance with the Eskom debt relief programme, and 
• A capital expenditure ratio of 87%. 

In Theewaterskloof, a Section 139 support action was approved in November 2024 after a sharp decline in its financial position. By August 2024, its revenue collection rate dropped to 64%, while cash reserves fell and commitments grew. The Provincial Treasury and Department of Local Government are supporting National Treasury in working with officials from the municipality to develop the Financial Recovery Plan. We are currently awaiting the adoption of the draft FRP. 

In Matzikama, an Operational Support Plan is being implemented, with R37.7 million of its Eskom debt already written off. Continued compliance with debt relief conditions is critical to this municipality’s recovery.

Despite initial resistance to National Treasury and Provincial Treasury support, a Section 139 intervention is under way in Kannaland, with a Recovery Plan in development and awaits adoption. 

These interventions underscore our commitment to all municipalities, regardless of political dynamics. 

Honourable Speaker, as I conclude, I would like to take this opportunity to congratulate Mayor Aletta Theron on her election as  Mayor of Laingsburg as part of a DA and ANC coalition government. As with all governments across this province, the Provincial Treasury and the Department of Local Government are here to assist as best as we can. 

CONCLUSION

The path to sustainable local governance is clear and is in the hands of the Western Cape people. 

I urge residents of this province to support stable governance at the ballot box. To vote for financial stability. To vote for quality services. And to vote for economic growth and jobs. 

Thank you.