Honourable members

Allow me to stand on the protocol that has already been observed by the honourable Minister Hlabisa

I am honoured to join Minister Hlabisa and Deputy Minister Prince Burns-Ncamashe today as we table these budget votes for COGTA.

We stand before this eminent House fully aware of the challenges that face our municipalities and the cooperative governance system at large in respect of distinctive, interdependent, and interrelated responsibilities. These challenges have a direct bearing on communities especially as they relate to, the sustainable delivery of basic services, the eradication of poverty and the creation of meaningful work opportunities.

These are the challenges we commit to address working together as part of the Government of National Unity. Our collective actions as a Government of National Unity will aim to enhance the intergovernmental and interdepartmental planning and coordination instruments, to promote good municipal governance and sound financial management as well as accelerate service delivery and institutionalise active citizenry for thriving cohesive communities.

THE MUNICIPAL INFRASTRUCTURE GRANT

In the current Administration, we intend to compel MIG-receiving Water Services Authorities to improve the uptake of infrastructure projects focused on the repairs and refurbishments of critical water and sanitation infrastructure. These municipalities must now utilize at least 10% of their allocations for this purpose.

The MIG grant also assists with the financing of the development of infrastructure asset management plans, enabling municipalities to better manage the condition and demand of their infrastructure. Municipalities are permitted to use up to 5% of their allocations to enhance project management capabilities. Underperforming municipalities will receive support to further strengthen these capabilities, to ensure improved performance.

Working with our provincial counterparts, we continue to support municipalities during the pre-implementation and implementation phases of MIG projects by guiding them to meet the MIG Programme requirements. This work is reinforced on a technical level by the Municipal Infrastructure Support Agent (MISA), which participates in verification processes during cost reimbursements.

The Department will continue to guard against unspent MIG allocations being returned to the national fiscus, thus depriving communities of much-needed services. CoGTA will intervene in municipalities with under-expenditure by applying the provisions of the Division of Revenue Act, allowing the department to retain a portion of the municipal MIG allocations and implement projects on behalf of these municipalities.

INTEGRATED URBAN DEVELOPMENT GRANT

We acknowledge the importance of critical infrastructure investment in the future of our municipalities and, by extension, the well-being of our citizens.

The primary purpose of the IUDG is to provide essential funding for public investment in infrastructure, particularly for the benefit of our poorer communities. By doing so, we aim to ensure that every citizen, regardless of their socio-economic status, has access to reliable and high-quality municipal services. This grant is also designed to encourage municipalities to tap into their own sources of capital finance, thereby increasing the overall funding available for public investment in economic infrastructure.

Currently, nine municipalities are part of the IUDG programme: Polokwane, Sol Plaatje, Steve Tshwete, Mogale City, Ray Nkonyeni, Umhlathuze, Stellenbosch, Drakenstein, and George. These municipalities have met the stringent qualification criteria set forth, demonstrating their commitment to using these funds effectively and responsibly.

I am pleased to report that all allocated funds were successfully transferred to the municipalities by 30 June 2024. This timely transfer ensures that municipalities have the resources they need to commence their infrastructure projects without delay.

MUNICIPAL SYSTEMS IMPROVEMENT GRANT

The MSIG is a Schedule 6 grant spend and accounted for directly by the Department, for the benefit of municipalities. Its purpose is to assist municipalities to perform their functions and stabilise institutional and governance systems as required in the Municipal Systems Act and related local government legislation. The accounting period for the implementation of the grant starts on 01 April each year, and end on 31 March of the ensuing year.

Twelve (12) projects are currently budgeted for in the 2024/25 financial year. A comprehensive list of these projects and the implementation status is available on the APP.

ALLOCATION OF DISASTER GRANTS – 2023/2024

There is an increase in disaster risks and disaster occurrences in the country which is an area of concern. This points to the lack of or inadequate investment in Disaster Risk Reduction and Climate Change Mitigation measures by the relevant organs of state across the spheres of government. The National Disaster Management Centre (NDMC), continues to facilitate the promotion of an integrated and coordinated system of disaster management among national, provincial and local government, statutory functionaries and other role players involved in disaster management.

MUNICIPAL ESKOM DEBT

Municipal debt requires urgent attention, particularly due to the significant amounts owed to Eskom and the escalating debt owed by customers to municipalities. As of the latest data, municipalities in South Africa collectively owe Eskom R78 billion, a substantial increase from R58.5 billion at the end of March 2023, surpassing the anticipated R68 billion for end-March 2024. Despite the majority of most municipalities participating in Eskom’s Debt Relief Programme, some struggle with its stringent compliance conditions, compromising threatening its successful implementation.

Simultaneously, municipal consumer debt has surged to R347.6 billion as of March 31, 2024, up from R306.7 billion in early 2023/24. Households account for the largest share, representing 73% or R253.6 billion of this debt. The growing non-payment culture of non-payment among municipal customers is severely impacting collection rates, exacerbating municipalities’ difficulties in servicing their Eskom debt due to low revenue generation. Current efforts to improve collections and reduce debt have been ineffective, necessitating innovative solutions from the new administration. The CoGTA Results Management Office (RMO), alongside institutions like MISA and SALGA, will in this administration work to assist in addressing this critical issue.

THE COMMUNITY WORK PROGRAMME

The Community Work Programme (CWP) is an anchor initiative for the Department of Cooperative Governance (DCOG) and it is the largest public employment programme, with a presence in all Local and Metropolitan Municipalities.

To date, the CWP has provided work opportunities to 266,000 participants, achieving demographic targets of 85% women and 2% people living with disabilities. Training has been provided to enhance the useful work that contributes to the development and maintenance of community assets. Despite its successes, the CWP has encountered challenges in fully achieving its mandate due to operational inefficiencies and inadequacies.

In an effort to address the deficiencies in the CWP, the Department has embarked on a review of the CWP Implementation Policy and Implementation Plan. Our goal is to maximize and visibly impact artisan and enterprise development, aiming to address poverty, unemployment, and inequality through work opportunities. The repurposed CWP aims to be community-centric, addressing identified shortcomings and enhancing useful work packages to improve municipal service delivery.

To enhance the efficacy of CWP implementation, Memoranda of Agreement (MOAUs) have been signed with Provinces have been signed. These MOAUs outline the roles and responsibilities between DCOG and Provinces, improving drastically the collaborative implementation of CWP as a partnership-based delivery mechanism and working towards the institutionalization of the Programme at the local level.

One key feature of our new approach is reducing reliance on a small group of implementing agents, with greater emphasis on implementing partners from all spheres of government and the private sector. The guiding principles of public-private Smart Partnerships for an impactful CWP involve accredited skills training for participants to optimize their work outputs, equip them with life skills, and enhance their employability and self-employment prospects.  

We look forward to working with all stakeholders as we implement our 2024/25 Financial year key Performance Indicators’ (KPIs). These include: the annual target of 255,000 participants; designing training plans for participants in artisanal skills; empowering participants through smart partnerships to facilitate their exit from the programme; and lastly, focusing on 30 priority municipalities for improved visible service delivery due to CWP participants.

We are actively working within the department to mitigate the impact of budget cuts in the CWP by exploring possibilities for restructuring the programme’s budget. We are engaging further with National Treasury on this matter. Additionally, the programme benefits from investments from both the private and public sectors. These investments are not in the form of direct monetary deposits to the department but come as in-kind contributions, such as training investments and direct stipend payments to participants.

CONCLUSION

Despite the challenges we face in local government, we believe that the ongoing and proposed efforts we are tabling to this House will begin to ensure that municipalities better deliver on their mandates and that we alleviate poverty and provide meaningful work opportunities for our citizens. We are committed to addressing the identified shortcomings and ensuring that local government continues to make a positive impact on the lives of South Africans. I urge this esteemed House to support the budget vote for COGTA, enabling us to continue this crucial work.

I thank you.