Municipalities must clean up their acts. If not, post-Covid SA will explode
Local governments, in a crisis worsened by Covid-19, must gather the political will to fight corruption, inefficiency as finances dwindle, but they’ll need help
Covid-19 has unleashed a perfect storm of crises on SA’s ailing municipalities, combining existing inefficiencies, poor governance and corruption with rapidly diminishing revenues.
As the coronavirus financial crisis bites, municipalities will see their revenue from national government and residents decline significantly. Many receive their income largely from allocations from the national fiscus.
According to figures from Stats SA, the economy contracted 51% on an annualised basis in the second quarter of 2020, in the three months to June. This is the biggest downward cycle since World War 2. The Treasury has forecast a debt to GDP ratio of 81.8% this year, with the budget deficit set to reach 14.6%...