ATC241101: Summary Report on Key Issues Emanating from the Portfolio Committee on Cooperative Governance and Traditional Affairs’ induction Workshop for the 7th Parliament, Dated 23 October 2024

Cooperative Governance and Traditional Affairs

SUMMARY REPORT ON KEY ISSUES EMANATING FROM THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS’INDUCTION WORKSHOP FOR THE 7^TH PARLIAMENT, DATED 23 OCTOBER 2024

1. BACKGROUND

Over several days, the Portfolio Committee on Cooperative Governance and Traditional Affairs convened a workshop with the Departments of Cooperative Governance and Traditional Affairs (CoGTA), the Municipal Infrastructure Support Agent (MISA), the Municipal Demarcation Board (MDB), the Commission for the Promotion and the Protection of the Rights of Cultural, Religious and Linguistic Communities (CRL Rights Commission), and the South African Local Government Association (SALGA). The workshop’s key objective was to induct Committee members and familiarise them with the core issues pertaining to the cooperative governance and traditional affairs sector in the context of the 7^th Term of Parliament. The following is a summary of the salient matters arising from the workshop:

2. DEMARCATION OF MUNICIPAL BOUNDARIES

Delimitation of municipal wards. The Committee is concerned thatcomplaints relating to insufficient consultation around municipal boundary demarcation processes, and decisions, are too frequent. These include the demarcation ofcommunities that live together as culturally and socially cohesive units into separate wards thus disrupting social dispute resolution mechanisms; unequal development due one neighbour receiving better municipal services than the other because they belong to different wards despite living in proximity; an instance of a farm property that has been split between two provinces; demarcation decisions that do not take sufficient accountof geographical and transportation barriers such as mountain ranges and rivers;inconvenient relocation of voting districts to different wards with adverse consequences on voter turn-out and ultimately the legitimacy of the democratic process; and the unworkable nature of wards that span a radius of up 120km– aproblemthat is especially prevalent in the Eastern andNorthern Cape provinces.

 

TheCommittees notes the Municipal Demarcation Board’s funding constraints, which among other things results incontinued reliance on municipalities to communicate its public participation activities, including the dissemination of meeting notices to communities. Municipalities do not always communicate these notices to the satisfaction of all stakeholders. Insufficient attention to thesematters risks undermining the Municipal Demarcation Board’s credibility.The Committee does not accept the Board’s emphasis onrigid compliance withpre-determined formulae when these are causing hardships, frustrations, confusion, conflict and instability in otherwise settled and stable communities. The Board is urged to review its approach, consider the formula’s impact, and revert to the Committee with a considered view.Relooking the blanket application of the formula is critical to preventing social disharmony. The Committee will also be engaging  the Minister of Cooperative Governance and Traditional Affair’son this matter.

Determination and re-determination of municipal boundaries.The Committee further expressed interest on the extent to which politics influenced recent demarcation decisions, noting that in the early years of the country's democracy demarcation was used to achieve legitimate political ends such as the economic development of previously marginalised areas. The Committee noted that the sustainability, economic viability, and the impact of recent municipal amalgamations on the lives of affected communitiesare matters of concern across all political lines. This is particularly pertinent considering the findings by the South African Local Government Association to the effect that over 70 percent of the municipal amalgamations formed in the wake of the 2016 local government elections have not achieved the intended purpose.

 

3. TRADITIONAL AFFAIRS

Male customary initiation fatalities. The Committee sought to be furnished with statistics relating to the deaths of male customary initiates since the coming into effect of the Customary Initiation Act of 2021. This would enable the Committee to assess the extent to which the legislation is responding to the problem. Preliminary evidence suggests that the legislation, including the structures it has established namely the National Initiation Oversight Committee and the Provincial Initiation Coordinating Committees, is possibly not responding adequately to the problem and that the core intervention may lie in modifying cultural and leadership attitudes towards the custom.

 

The possible legislative deficiency can be deduced from, among other things, the363 and 229illegal initiations schools respectively in operation during the2023 winter and 2024 summer initiationseasons, as well as the 101 initiation-related deathsand the 3794 injuries recorded during this period.The Committee stressed the need for a deeper interrogationof the nature of the problemincluding looking into the role of cultural attitudes.Questionsneedto be raised as to whether thelegislation is the right medicine.

The Committee registered thatthe Department of Traditional Affairs’ interventions on this matterdid not come out clearly. The Departmenttherefore needstoreorganiseits discussion in this regard and return to address the Committee on the measures being implementedto address initiation-related deaths. For the envisaged follow-up engagement, the Minister and the Department are urged to extend invitationsto all involved stakeholders including representatives from the relevant line-function departments and traditional leadership structures. The persistent mutilation and death of initiates cannot be allowed to continue.The Committee’s overarching emphasis in this regard is on ensuring accountability for the loss of lives and on taking all necessary measures to achieve this end, including reviewing the applicable legislation if required. As incidences of male customary initiation malpractices varyin severity acrossprovinces and regions, theCommittee furtherfelt that it would be appropriate to adopt a more differentiated approach toresolving the problem,with more emphasisputon perennially problematic provinces and regions such as those found in the Eastern Cape province.

A subsequent briefing received from the Eastern Capeclarified several matters, which put the Committee in a more enlightened position than previously. Key among these is the need to ensure that the Customary Initiation Act permeates across traditional leaders and communities at the grassroots level. Powers and responsibilities need to be assigned at this level as to avoid having token structures that are far removed from the realities on the ground.The grassroots structures, including headmen and headwomen, should be at the forefront of the process of amending the legislation.The Committee envisages engaging both the Minister and the Eastern Cape Premier in this regard.

The amended legislation should also reflect the diversities in the practice of the male customary initiation custom across the various kingdoms, but also include a level of standardisation as to arrest its increasing commercialisation. A review of the terms defined in the Act will also be critical to ensure common understanding. The term ‘initiation school’ for example turns out to have an area-dependent meaning. In some areas, two initiates in one bomaconstitute an ‘initiation school’ while other areas use the term to describea congregation of initiates.

The Committee emphasized the importance of involving all critical stakeholders in combating the scourge of initiation related deaths and injuries and called especially for women to play their rightful role.Committee members noted and flagged for discussion the point regarding the inadequate costing and resourcing of the legislation Parliament has passed, including the Customary Initiation Act. The Eastern Cape was acknowledged to be in dire need of the requisite resources to implement the measures necessary to prevent deaths and injuries during initiation seasons, including thorough public education. Theavailing of these resources need not await the amendments to the legislation.An oversight visit to the province will be considered.

Traditional and Khoi-San Leadership Bill. The Department of Traditional Affairs briefed the Committee on its contemplated introduction of the Traditional and Khoi-San Leadership Bill, which responds to the invalidation of the Traditional and Khoi-San Leadership Act (2019) by the Constitutional Court, owing to deficiencies in Parliament’s and the Provincial Legislatures’ public participation processes. The Committee accepted that, once in operation, the Bill will go a long way in addressingthe several gaps identified including the modalities around the participation of traditional leaders in municipal councils, inconsistencies in the resourcing of Kings, andthe formalisation of the Kings and QueensCouncil as a consultative body to guide the institution of traditional leadership. The Committee further envisages that the Bill will address several outstanding matters relating to the Khoi, San, and related traditional communities includingensuring that their recognised levels of traditional leadership are on par with the rest of other traditional communities. The Committee acknowledges the concern that that there is no recognition of Khoi and San traditional leaders and communities foreseeable in the next two years due to the legislative process that must first unfold. This will delay the resolution of the inequity whereinAmakhosi  are receiving government benefits, which are denied to the Khoi and San.

 

The Committee remains alive to the sensitive matters that continue to aggrieve Khoi and San communities as emphatically raised by Committee members, including the Traditional and Khoisan Leadership Act’s inadequacy in addressing issues relating to accommodating the already existing Khoi and San traditional leaders and communities; land dispossessions that took place before the Land Act of 1913;and thedisregard of the Khoi-San’s claims to specific mineral rights by some mining houses. The Committee further reiterates its previous decision to support the affected Committee members to table their concerns to the Minister of Cooperative Governance and Traditional Affairs. The Minister’s undertaking to address the Committee on the outcome ofthis engagement is also noted.Detailed engagement on these matters will ensue once the Department of Cooperative Governance and Traditional Affairs tables the Bill to the Committee. The Department is urged to move with speed in this regard as to ensure that the requisite amendments are effected timeously.

In its engagement with the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities, the Committee further drew attention to the need for the preservation of diminishing  languages, including Khoi and San languages such as the N/uu language. Other relevant stakeholders such as the Pan South African Language Board and the Department of Education also need to be brought into the discussion.

Kingship and queenship disputes and claims. The Committee further sought to be apprised on the nature of disputes and conflicts affecting the country’s Kingships and Queenships in connection with the selection of successors to the thrones, resulting in these matters being brought before the courts.These court battles have affected most of the country’s Kingships and Queenshipsincluding the VaVhenda, BaPedi, AmaNdebele, AmaXhosa, AmaMpondo, AmaMpondomise, AmaZulu and the Modjadji Royal Kingdoms. While the Committee understands and appreciates the role of the courts in resolving these disputes and claims, it calls for more consideration to be given to alternative mechanisms of facilitating the reduction of these disagreements. The current absence of an effective traditional institutional mechanism that prevents disputes from playing out in the courts is of great concern to the Committee.The Committee therefore recommends exploration of an alternative dispute resolution mechanism, preferably located within the institution of traditional leadership.

 

The Committee affirms and supports government’s recognition of successors based on the Royal family’s recommendations as informed by its customs, historical and cultural considerations. This includes examples such as the resolution of the Queen Modjadji case in Limpopo. The Committee has also isolated the well-known and outstanding issues specific to King Mabhena from the KwaNdebele Kingdom and will be addressing these (including following up on the outcomes of the President’s visit and a court ruling) with a view to bringing the matter to closure. 

Traditional leaders’ discontent with the SPLUMA. The Committee notes traditional leaders’ long-standing discontent with the Spatial and Land Use Management Act (2013) including concerns around procedural matters concerning the Act’s referral to the National House of Traditional and Khoi-San Leaders. While the Committee notes and welcomes the contemplated introduction of a SPLUMA Amendment Bill,it recognises that amending the legislation is outside of the Department of Traditional Affairs purview butwill continue engaging the matterin line with its parliamentarymandated responsibility.

 

4. CRL RIGHTS COMMISSION

TheCRL Rights Commissionbriefed the Committee extensively on its work, highlighting cultural, religious and linguistic cases received, resolved and still pending. Among the issues drawing the Committee’s interest was a cultural case relating to an inaccessible grave site in KwaZulu-Natal owing to the fact the farm owner lives abroad, and the culturally insensitive way in which the City of eThekwini dealt with the shortage of burial space, namely by burying several people in the same grave, including those who are not related.The Committee also found the Commission’s work relating to the repeal of the Witchcraft Suppression Act enlightening and noted the vulnerability of cognitively impaired older women to accusations of witchcraft and their consequent susceptibility to mob violence, particularly in rural areas.

The Committee furthernoted that there are stillcommunities who do not know about the existence of the CRL Rights Commission. The Commission’s location in Gauteng without satellite offices in the rest of the provinces compounds the problem. To further ensure increased visibility, the Commission was urged to profile its work including seeing to it that its reports receive adequate publicity. Publicising successful resolution of cultural, religious and linguistic cases relating to one municipal area will serve as a precedence and sensitise other municipal areas dealing with similar issues.

5. CONSTITUTIONAL INTERVENTIONS

DCoG briefed the Committee in connection with its responsibility to support municipalities to fulfil their statutory functions as outlined in the Constitution and various local government statutes.This responsibility is enshrined in Section 154 of the Constitution and is envisaged as the default approach tosupporting municipal functionality. Where the Section 154  supportfails to yield the expected result, the Department (both nationally and provincially) is constitutionallyempowered, ideally as a measure of last resort, to intervene in a municipality in accordance with the procedure set out in Section 139 of the Constitution.

The Committee observed that the Department presented high-level and generic information without providing much detail. Detailed information was provided only in respect of the three municipalities currently under intervention in terms of Section 139(7) of the Constitution, namely the Lekwa, and Enoch Mgijima local municipalities and the Mangaung metro. However, there are 36 municipalities currently under intervention in terms of the various sub-sections of Section 139. The status, progress and the experience emanating from the administration of these interventions is also of interest to the Committee.The Committee therefore requested the Department to re-table a more structured and augmentedreport that expandson these 36 interventions.

The Committee further engaged the Department on its characterisation of the measures currently being implemented to improve the functionality of the eThekwini metro, noting that neither Section 139 nor Section 154 were the legislative basis for the Presidential Task Team’s presence in the metro.In the absence of a legislative basis, there was nothing preventing the municipality from rightfully objecting to the Task Team’s presence. Committee members also reflected on the Executive’s tendency to administer Section 139 interventions incorrectly, such as the deployment of administrators even when a municipality had not been dissolved in terms of Section 139(1)(c)or 139(5)(b)of the Constitution. The Committee is concerned that, ifleft unchecked, these mischaracterisations can be a recipe for confused and legally assailable interventions.

6. COMMUNITY WORK PROGRAMME

The Department of Cooperative Governance’s report on the Community Work Programme (CWP) focused on several aspects, including the factors that informed the programme’s establishment, the nature of the implementation model used to administer the programme, the programme’s budgetary arrangements, and the constraints hampering the realisation of the programme’s full potential. The CWP exists as a component of government’s Expanded Public Works Programme and seeks to provide regular predictable work and income to the unemployed and underemployed. It offers 100 days of work per year, managedeither as two days per week or eight days per month over a one year period,and is currently benefiting approximately 255 000 participants.

The Department contracts (usually over a three-year period) Non-Profit Organisations (NPOs)to serve as the CWP’s Implementing Agents, whichentails assuming responsibility for, among other things, the selection and appointment of participants, the procurement of tools and equipment, and the collection, recording and safekeeping of accurate and complete participant data and supporting documentation. Since the 2018-19 financial year, more than R23bn has been spent on administering the CWP.However, the programme has seen a budget cut of R1.3bn in 2024-25, which may necessitate the offloading of 55 000 participants.

In response to the Department’s report, Committee members raised several concerns relating to the payments made to the NPOs, the criteria for the selection of the NPOs and the participants, the transfer of skills to the participants, the management of CWP assets, monitoring of participant performance, and the potential conflict that will emanate from the decision to discontinue the participation of old age grant beneficiaries, which would affect 35,833 individuals.The Department has deemed the participation of old age grant beneficiariesto be a ‘duplication of public benefits’ and Committee members’ concern in this regard is that the CWP may be deviating from its original intentof complementing rather than replacing the existing livelihood strategies of the unemployed and underemployed. Following the Committee deliberations, the Department was persuaded to reconsider its position and defer its decision until further notice.

Committee members noted that the amounts spent on the NPOs (the non-wage component), which equalled approximately R515m as at 31 March 2023, were excessive. This has been a source ofwidespread outcry on the ground, along with complaints to the effect that the CWP was being misused.Committee members further felt that the process of selecting NPOs and CWP workers needed to be clear and more openas to minimise perceptions of unfair recruitment practices. Committee members observed that, in some instances, CWP workers are not monitored adequately as they can be seen sitting idly for hours on end, thereby foregoing the opportunity to acquire the skills critical to their employability outside the programme.The Department’s apparentcharacterisation of the CWP as a job creation vehicle was inconsistent with Committee member’s understanding of the CWP as primarily intended to impart skills that would enable the participants to exit the programme and find work elsewhere.

Having previously reported on embarking on initiatives to review and revise the CWP’s implementation model, the Committee noted that the Department’s report did not establish any clear continuities with this undertaking. Further update in this regard was requested. The Committee further sought more clarity around whether the Department intends administering all aspects of the CWP in-house orwill continue to outsource some of these functionsto the NPOs.This alluded to the problematic experience of dealing with the NPOs as it relates to, among other things, payments made to ghost and deceased participants, litigation,and the NPOs’ insufficient familiarity with public sector accounting standards and practices, which has given rise material irregularities and audit qualifications.

The Committee found the Department’s subsequentwritten reply and verbal responses to the foregoing concerns unsatisfactory, and consequently resolved to schedule a further engagement on the CWP as soon as the Minister signs on the revised implementation model.

7. STATE OF LOCAL GOVERNMENT

DCoG briefed the Committee on the State of Local Government for the financial year starting on 01 July 2022 and ending on 30 June 2023, with a view to providing insight on municipal performance across six pillars, namely: putting people first, building capable local government institutions, governance, financial management, local economic development, and service delivery.Most topical were the issues around distressed municipalities and debt owed by, and to, municipalities.

Distressed municipalities. The Department reported that the number of municipalities identified as being distressed has decreased from 66 in 2022 to 35 in 2023, while stable municipalities increased from 30 to 61 over the same period.However, the Committee is concerned that the Department’s determinants of distress seem to be biased towards financial health, with inadequate emphasis on service delivery. Committee members observed that good financial health does not necessarily translate to better service delivery. Also noted was an apparent disconnect between the indicators used to determine municipal distress vis-à-vis the indicators presented as characteristics of an ideal municipality.Furthermore, the report did not delve into sufficient detail with respect to the causes of municipal distress whereas the Committee is interested in specifics that would inform its oversight priority areas. The Committee therefore resolved that the Department should submit a more detailed report that discusses the 35 distressed municipalities individually.

 

Municipal debt. Outstanding consumer debt owed to municipalities reportedlyamounted to R313.2bn as at 30 June 2023, while outstanding debt to creditors equalled R100bn. However, the Committee felt that the report missed the crux of the issue, namely whether this debt will ever be paid. The resolution of this question is the Committee’s ultimate concern, and the Department therefore needed to transcend the situational analysis and agree on a solution that moves the Committee forward. The hopelessness that has hitherto enshrouded this matter ought to end and the Department (and the partners involved) should come back to the Committee with details on actions being taken to resolve the problem. The Committee noted the Director-General’s (DG) characterisation ofthe Eskom debt relief programme as cumbersome and unlikely to achieve its objective owing to the stringent compliance conditions imposed on the participating municipalities. Of the 71 participating municipalities, only ten can comply with these conditions and even these do so with difficulty.

 

The DG proposed an alternative and possibly workable modelakin to the model mooted by Rand Water following its appointment as the Implementing Agent for the intervention instituted in the Emfuleni Local Municipality in terms of Section 63 of the Water Services Act (1997). The model involves the establishment of a standalonespecial purpose vehicle that will work with the private sector to assume the operations and maintenance of municipal water services, including theabsorption of the municipality’s R1bn water debt.The special purpose vehicle will ringfence water revenue and the related government subsidiessolely for water and sanitation services without funds being absorbed into the whole municipal system. The Committee encouraged the DG to canvass his personal perspective with rest of the Department as to agree on a common institutional position that can be tabled to the Committee for further discussion. The Committee further sought to be furnished with an update on the work of the Interministerial Task Team on Eskom debt.

8. DISASTER MANAGEMENT

The National Disaster Management Centre (NDMC) briefed the Committee on the nature of its work, highlighting, among other things, its role in terms of the National Disaster Management Act (2002), the institutional arrangements for disaster management, post disaster rehabilitation, disaster management planning by municipalities, and the review of the country’s disaster management system. Highlighted areas of concern that require intervention include poor expenditure of disaster grant funding by municipalities; slow pace of reconstructing or repairing disaster damaged infrastructure due to municipal dysfunctionality; deficient municipal technical capacity for project planning, packaging, implementation, monitoring and reporting resulting in poor workmanship and incomplete projects; and poor coordination of disaster management projects across the three spheres of government.

From 2017-18 to 2023-24, the NDMC has disbursed R7.5bn in disaster grantfunding, with a reported expenditure of R3.9bn by municipalities and provinces. The overall conclusion, as summarised by the DG, is that the country has not invested properly in disaster risk management. Depending on the national fiscus to fund disaster management is, from the DG’s point of view, not sustainable.To rectify this, the Department is due to submit a proposal  to Cabinet, motivating for the review of the disaster funding model as well as the current disaster management institutional arrangements.

Committee members noted that local and district municipalities have had difficulties in maintaining functional fire services departmentsdue to lack of adequate finances. The Joe Gqabi District, for example, has no fire trucks. The erection of human settlements on hazardous locations - such as flood lines, swamps and coastlines - is the Committee’s other area of concern. In addition to proactive measures to prevent the occupation of disaster-prone areas, Committee members recommended a retrospective investigation into human settlements that currently stand on geo-hazards, including flood lines. Dissatisfaction was voiced in connection with the Head of Disaster Management in the eThekwini metropolitan municipality who has been found to be unresponsive and insensitive to the plight of disaster victims.

Committee members further noted that there seemed to be no clear answer as to how the NDMC will resolve the key challenge of uncoordinated and delayed disaster response.The Committee wished to support the DG’s thinkingaround a combined approach to post-disaster damage assessment as opposed to the current arrangement where the assessment is conducted on four separate levels, thus compromising disaster response agility.However, as the combined approach sounded more like the DG’s personal reflection than an official departmental policy position, its implementation was found doubtful.In response, the DG assured the Committee thatthe combined approach has been formalised and is expected to finalise post-disaster assessment within three days. The inclusion of engineering expertise from the South African National Defence Force will also expedite the assessment process.

The Committee further observed that there is insufficient emphasis on counselling services to people affected by disasters and underscored the need to appreciate the trauma resulting from the sudden loss of valuable belongings. Compensation for the loss of these belongings also needed clarification.

9. DISTRICT DEVELOPMENT MODEL

DCoG briefed the Committee on the District Development Model (DDM), highlighting its genesis, rationale, anticipated outcomes, implementation challenges and critical success factors. Having completed theestablishment and piloting phase (2019-2023), the Department is now focusing on the institutionalisation phase (2021-2025) and will thereafter (2025 and beyond) concentrate on the DDM’s sustainability.The current institutionalisation phase encompasses, among other things, the promulgation of the Intergovernmental Relations Framework Act (2005) Regulations to strengthen Intergovernmental Relations (IGR) structures and align them with the DDM approach; the development of 52 One Plansfor the 44 District and eight metro spaces; and the identification and establishment of DDM hubs.

Among the key lessons learned thus far is that the DDM has had limited impact on IGR, thus pointing to the need to develop and implement measures to strengthen intergovernmental relations. There is also no policy mechanism to achieve One Budgets to support the One Plans. A further cited challenge is the limited involvement and participation of DDM national political champions. Having welcomed the Department’s presentation and appreciating its frankness on the DDM’s implementation challenges, Committee members raised several issues of concern including the President’s appointment of DDM political champions, which was seen to exemplify an instance of national interference into the affairs of local government.The interference characterisation is premised on the understanding that the DDM is an ‘opt in’ and does not represent a legal compliance obligation that compels municipalities to implement it.

Noting  that the management of intersectoral arrangements requires a specific set of skills, Committee members proposed thatgovernment should consider assessing performance based on the extent to which the relevant officials and political champions succeed in bringing the various sectors together. This was suggested in the context of the identified coordination weaknesses amongst the DDM role-players. These coordination weaknesses are understood to be an intrinsic feature of South Africa’s federal and multi-lateral government system as well as the liberal democratic model in general.Given that different countries have devised different mechanisms to address the coordination problem, the emergent lessons from these country experiences ought to be pooled together. Members further underscored the importance of integrating the DDM into existing plans at municipal, district, and provincial levels, even suggesting a dedicated focus on fixing existing plans. The Committee impressed on the Department to do its utmost to avoid having the DDM as a separate ‘add on’ to existing plans.

Among the critical success factors for a functional IGR system, Committee members highlighted the importance of ensuring that all the relevant actors understand their roles and responsibilities in the DDM, including sharing a common objective and end goal. The reported non-participation by some role players could reportedly be due to lack of buy-in owing toinsufficient role clarification.The current skills and capacity deficits at local government level (as chronicled in the Auditor-General’s reports), and the absence of a clear indication on how this is being resolved, further prompted members to be sceptical about the prospects of a successful DDM.The Minister agreed that the DDM can only work when municipalities are fully-functional. The DDM, in the Minister’s view, presents an opportunity for skills sharing that will assist in bringing the desired municipal functionalityinto reality.

The Committee also advised the Department to note and address the perception that a lower graded District municipality will use the DDM as an opportunity to draw on the budget of a higher graded local municipality to bolster the district’s weak financial position.In response, the Department drew the Committee’s attention to the promulgation, in May 2024, of theIntergovernmental Relations Framework Act Regulations, which is envisaged to go a long way in addressing the several concerns raised including the question of weak districts versus strong local municipalities.

Considering the President’s prerogative to appoint Ministers and Deputy Ministers as DDM political champions and the IGR Framework Regulations vesting the overall political championship in the Premier who can also appoint Members of the Executive Council (MECs) as political champions, members were wary of the possible proliferation of political principals that could blur reporting lines and create confusion.This was understood to be another potential reason behind the reported non-participation by some role-players. In response, the Minister undertook to assess the matterand will, if necessary, utilise enforcement measures to end the lack of cooperation.

Members further decried the lengthy turnaround time between the DDM’s conceptualisation and the tangible impact on the ground. The Committee is not prepared to allow the Departmentto plan for another five-year term of government whilst there is a dire need to attend to pressing issues on the ground, such as incorrect billing. The DDM ought to be sensitive and responsive to these matters and the Committee called on the Department to move with speed towards the realisation of this objective. The model’s success will be contingent on its practicality and the extent to which it assists to solve people's common problems in relation tomunicipal service delivery. The Committee’s future interactions with the Department on the DDM will therefore involve assessing the extent to which the model is assisting the people on the ground.Members also invited the Department to demonstrate theinvestment return on the substantial funds expended into piloting the DDMand urged it to place more emphasis on how the chronicled DDM implementation challenges will be resolved, with reference to specific timeframes.

10. EASTERN SEABOARD DEVELOPMENT PROGRAMME

The Committee received a progress report from MISA in connection with its role as the Implementing Agent for the Eastern Seaboard Development Programme (ESDP). The Programme is a government initiative to develop South Africa’ s Eastern Seaboard Region with a view to incubating one or more smart cities in the area, anchored on the economic potential of tourism, the oceans economy, mineral resources, agriculture, film and renewable energy. The Region spans two provinces, the Eastern Cape and KwaZulu-Natal, and includes four Districts (OR Tambo, Alfred Nzo, uGu and Harry Gwala) and the 17 local municipalities within their jurisdiction.

Having completed a renewable energy feasibility study, a regional spatial development framework, a regional master investment plan, and a regional integrated transport master plan, MISA is currently undertaking project preparation and social facilitation. This involves preparation of bulk infrastructure, agriculture, tourism and Information Communication Technology projects for financing consideration as well elevating the ESDP through a communication drive to communities, traditional leaders, business and investment partners. There are 53 identified ESD priority projects at an estimated value of R56.8bn across the circular economy, transport, health, human settlements, agriculture, maritime/eco-tourism, water, tourism, and information technology sectors. The enormity of the Programme’s scale is unprecedented and implementing it will require a special mechanism. In this regard, MISA is benchmarking a Special Purpose Vehicle to better gauge the capacity and resource requirements for managing such a large-scale development endeavour.

The Committee observed that the Programme is unique and interesting in that it is the first time to see an endeavour of such large magnitude and scope being attempted. The Programme’s job creation potential was immense.Similarities with the District Development Model were noted, with emphasis on the coordination aspect and how mastering it will effectively meana successful execution of the DDM.While DDM implementation challenges were well elucidated, the Committee felt that MISA had not done the same with respect to the Eastern Seaboard Development Programme. As most of the 17 municipalities within the ESD region had not obtained favourable audit outcomes, the Committee was not convinced that they could handle the additional responsibilities that will come with the ESDP. It was therefore advised that MISA’s priority should be on strengthening and building capacity within these municipalities. Any assumption to the effect that capacity will automatically flow from the ESDP was likely to be mistaken. MISA also needed to prioritize addressing the fact that most of the residents in the ESD region are indigent and lack access to bulk infrastructure.

The Committee is further concerned that the ESD is a long-term programme that will span several decadesand will consequently be vulnerable to the vagaries of the various political cycles. The Kei River Development was cited as an example of an initiative that succumbed due to lack of buy-in from a new political leadership. Committee members also noted that the ESD region is a site of several land claims that could see the Programme encountering resistance from the claimants. The previous history of unsuccessful project execution in the region, such as the uMzimvubu water scheme, also means that there is no reliable track-record to inspire the Committee’s confidence in the ESDP’s success.Further triggering the Committee’s less sanguine view on the Programme’s prospects was the absence of a clear indication of how things will be done differently to avoid the pitfalls that doomed the previous endeavours.

Committee members also struggled to understand the value proposition envisaged to drive socio-economic growth and attract investorsin an area characterised by high levels of unemployment and low levels of urbanisation.While the Committee noted the economic potential of the agriculture and tourism sectors,it found no clear answer as to how this potential will be maximised.Given the Programme’s complexity and its extensive governance structures, the Committee furtherindicated the usefulness of having a dedicated Programme Manager in cognisance of the fact that MISA officials are expected to assist in many other areas. MISA assured the Committee that its contemplated Special Purpose Vehicle is a response to this concern.

The lack of clear timelines for the implementation of ESDP projectsdiminishes the Programme’s appeal to critical potential stakeholders such as Amakhosi who are anticipated to avail land parcelsfor development. In the absence of concrete project plans, Amakhosi are not wont to commit the expected land parcels. The provision of definite plans, timelines and clear direction to stakeholderscan address this problem and mitigate the Committee’s scepticism on the ESDP’s prospects.

11. TECHNICAL SUPPORT TO MUNICIPALITIES

MISA also briefed the Committee in connection with its mandate to provide technical support, advisory services and, occasionally, infrastructure funding support to municipalities. The technical support programme includes interventions around reduction of non-revenue water losses, creation of reliable water supply services in municipalities, labour intensive construction, Municipal Infrastructure Grant support, and access to electricity services. Examples of MISAflagship infrastructure projectscurrently in progress across several provinces were presented. MISA also offers various capacity building support programmes relating to, among other things, technical training course for municipal officials, recognition of prior learning for process controllers, professionalisation of municipal officials, andseveral interventions targeting unemployed youth.Poor municipal governance,administration and financial management as well as vacancies in critical positions were cited among the factors that render the execution of MISA’s technical support mandate difficult.

Of key interest to the Committee was the extent to which MISA’s support has brought about tangible change in municipalities for the betterment of communities. The Committee wished to be furnished with objective records in this regard.Committee membersfurther sought to know how MISA could be of assistance regarding a portion of Kliptown that has, over the years, been consistently excluded from developmental projectsdespite a series of requests to the City of Johannesburg to intervene.Members were advised that the Urban Settlements Development Grant and Neighbourhood Partnership Development Grant could be assistance in this regard.Attention was also brought to the need to review the Cooperative Governance and Traditional Affairs Minister’s discretion concerning the establishment of a MISA Advisory Board.

With reference to the 25 perennially slow-spending  municipalities that needed to be persuaded to allow the upfront conversion of their conditional grants from Schedule 5B to 6B of the Division of Revenue Act to facilitate better spending and prevent the funds from being returned to the national fiscus, the Committee felt that National Treasury needed to be engaged on provisions that would empower the Department of Cooperative Governance to initiate the conversions without reliance on the consent of the municipalities concerned.

12. SPATIAL TRANSFORMATION

The Department of Cooperative Governance briefed the Committee on the Integrated Urban Development Framework (IUDF), which is government’s response to the upward urbanisation trajectory andthe unique conditions and challenges facing South African towns and cities owing to apartheid legacies. Central to the IUDF’s envisaged outcome is spatial transformation, which involves ‘reversing the inefficient spatial pattern in a way that promotes both social and economic development while protecting the environment.’ This is to be achieved through the IUDF’s nine policy levers comprising integrated urban planning and management, integrated transport and mobility, integrated and sustainable human settlements, inclusive economic development, efficient land governance and management, integrated urban infrastructure, empowered active communities, effective urban governance and governance systems, and sustainable finances.

Further highlighted was the IUDF’s implementation planacross metros, intermediate cities and small towns over the 2020-2025 period. The funding instrument to support the IUDF’s implementation is the Integrated Urban Development Grant (IUDG), which amounts to R5.3bn in 2024-25. To qualify for the Grant, participating municipalities must meet certain minimum qualifying criteria based on indicators around top management stability, unqualified audit findings, low UIFWE (Unauthorised, Irregular, Fruitless and Wasteful Expenditure), high capital expenditure and compliance with performance reporting in terms of Section 71 of the Municipal Finance Management Act (2003).

Having indicated that the IUDF is a long-term intervention and that five or more additional years will elapse before its impact can be felt on the ground, the Department could not elicit the Committee’s sympathy. The Committee felt that the IUDF would be of no utility ifperpetually afforded more time, on top of the decades that have passed since the end of apartheid, to achieve its spatial transformation objectives.

13. MUNICIPAL AUDIT OUTCOMES

The Auditor-General of South Africa (AGSA) briefed the Committee on the Municipal Finance Management (MFMA) audit outcomes in respect of the municipal financial year ended on 30 June 2023.The AGSA report covered 247 municipalities whose audit had been completed by 31 March 2024, with seven ofthe remaining 10 audits finalised by 20 June 2024. The AGSA’s overall key message was that ‘the audit outcomes have not improved meaningfully since the end of the previous administration’s term.’ Of the 254 audited municipalities, 110 received unqualified audit opinions on their financial statements but with material findings on the quality of performance reports and/or compliance with legislation. Of the 110, 77 have remained on this category since the end of the previous administration’s term.

On the non-submission of annual financial statements (AFS) for auditing, the AGSA indicated that the Ditsobotla and Maluti-a-Phofung local municipalities had not submitted their AFS for two and three consecutive financial years respectively. On the other hand, the number of municipalities that submitted AFS by the legislated date has increased to 91 percent, up from 81 percent in 2021-22. The issuing of Material Irregularity (MI) notifications in respect of late or non-submission of AFS contributed to this upward trend. The number of ‘clean audits’ has decreased from 38 in 2021-22 to 34 in 2022-23 mainly due to vacancies in critical positions. As a call to action to address the root causes of poor audit outcomes, the AGSA recommended the professionalisation and capacitating of local government, building capable institutions with intergovernmental support, and fostering a culture of ethics and accountability.

The Committee intends engaging the Department of Cooperative Governance to ascertain the interventions undertaken in response to the AG’s report.The Committee further anticipates using the report to enrich its oversight workover the troubled municipalities as to strengthen accountability. Committee members found thepoor audit outcomes in metropolitan municipalities particularly concerning and difficult to justify in the context of the financial resources and technical skills available at their disposal. The anticipated interaction with the Department of Cooperative Governance is expected to include a detailed explanation in this regard. The Committee further found it unacceptable that of the 254 audited municipalities, only 34 achieved clean audits – a concern amplified by the fact that the performance standard has regressed compared to the previous financial year. The passing of unfunded budgets by 42 percent of the auditees, and the receipt of consecutive disclaimed audit opinions, are the Committee’s other areas of concern as theselink to poor service delivery.

Also not found particularly encouraging are the audit outcomes of municipalities not classified as dysfunctional or distressed.The Committee isolated nine critical matters for the Department to address, namely: the deteriorating state of municipal audit outcomes; the receipt of repeated disclaimers; the inefficient and ineffective use of consultants to assist with audit preparation; political interference in the municipal administration; the use of conditional grants for unintended purposes; the passing of unfunded budgets; unauthorized, irregular, fruitless and wasteful expenditure; consequence management with respect to the issues raised in the AGSA report; and criminal investigations arising from the latter.

14. SOUTH AFRICAN LOCAL GOVERNMENT ASSOCIATION