Salga said while it appreciates the R8.4 billion increase in allocations to local government, this allocation remains inadequate.
The South African Local Government Association (Salga) has again raised concerns about the funding of municipalities in the country, saying the funds provided by the national government were inadequate.
The association for municipalities across the country spoke on the issue of funding shortly after Minister of Finance Enoch Godongwana delivered his Budget speech last week.
In a statement, the association said while it appreciates the R8.4 billion increase in allocations to local government, this allocation remains inadequate.
It said local governments receive a portion of the national fiscus through grants allocated to them by the national government.
Salga added that the white paper of 1998 presumed that local government would be capable of generating 90% of its revenue, a presumption which has not materialised.
It said currently, municipalities can cover 60% of their expenditures on their own (2018-2022 National Treasury financial data). This indicates a shortfall in the funding for local government to achieve its mandate to deliver services and the developmental objective.
Salga chairperson: Municipal Finance and Fiscal Policy Working Group councillor Lesetja Dikgale said: “Inadequate funding of local government undermines the notion of developmental local government and therefore Salga reiterates its calls for a review of the local government fiscal framework.
“Inadequate municipal funding and limited budgets have a direct correlation to the prevailing challenges confronting many of South Africa’s municipalities, especially those small and remote municipalities,” said Dikgale.
The association said it is acutely aware of the tough economic conditions that the country finds itself in and supports the fiscal strategies employed by the government to ease the economic pressure the country is experiencing. However, there should be stringent management of debt as municipalities are highly impacted by these external factors and decisions.
“Furthermore, Salga acknowledges the inefficiencies in municipalities in spending the grants. Failure to use grants on time results from various internal and external factors such as slow supply chain processes, objections raised by competing suppliers after work has been allocated to specific suppliers, interference by “construction mafias”, among others. Salga encourages municipalities to do better and spend all the allocated funds in line with laws and regulations governing local government,” said the statement.
The Mercury
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