We are now more than four months from the day the country embarked on a strict lockdown to prepare our health sector for the peak in the Covid-19 pandemic, which we are nearing. In those early weeks, the government at a national level at least managed to get all of us working together for the common good.

It was something universally praised, even among the most vociferous of our commentators on the social media platforms that they dominate. As we head into the peak of this pandemic, which promises much pain to our society, our municipalities are in dire straits. Things are not improving when you consider auditor-general Kimi Makwetu’s report last week that showed only 20 of 257 municipalities received a clean bill of health.

In the perfectly titled report “Not much to go around, yet not the right hands at the till”, we have to wonder about the efficacy of our response to Covid-19. A few weeks ago, finance minister Tito Mboweni painted a picture of just how barren SA’s coffers are as a result of years of the underperformance of the economy. Despite this he had to allocate additional funds to municipalities in his “emergency budget” because it is through them that we respond to such hardships.

Makwetu’s report raises anxiety about just how municipalities will respond to this crisis, which is literally a matter of life and death. There was evidence of maladministration of funds with unauthorised expenditure at R11bn, irregular expenditure at R32bn and fruitless and wasteful expenditure increasing by R2bn. To put this into perspective, an already tight Treasury allocated an additional R21.5bn for Covid-related health-care spending and proposed a further allocation of R12.6bn for the front-line response to the pandemic.

It is frightening what is happening at our municipalities and we are at a point where the decay will be most tested in the coming weeks. Critics of the Treasury’s stimulus plans need to perhaps first focus on the continued collapse of governance at the coalface of service delivery, which is draining the country of resources.

We implore the state to take drastic action to get to the bottom of this. There are many exogenous factors that have contributed to our economic underperformance and the lack of confidence in recent years, but we need to start by fixing the mess we created as a country. It begins with ethical leadership, something sorely lacking in our municipalities. State-owned enterprises have seen board changes over the past two years in attempts to improve governance, and that’s a focus we now need to turn to municipalities.

On a national level, we may applaud the state’s war against this pandemic, but it is at municipal level that the battles will be fought. And it is at this level that we’ve seen cases of opportunists taking advantage of the crisis, with reports of looting of food parcels and issues around contracts to supply schools with water tanks.

We have long had an ethical deficit in this sphere of government. Despite spending about R1bn on consultants, the outcomes are barely improving. Now, more than ever, the question arises of how we get these municipalities working in our best interests. As a business community, we are ready and willing to help in the administration of these municipalities as we head towards the peak of the pandemic and in its aftermath.

Makwetu warned last week that as municipalities prepare to service residents during the pandemic, their continued governance and financial failures mean that too few municipalities are spending effectively enough for their provisions to see a positive impact on the ground.

“Local government, as it has been for many years, has not had much resources to carry out its duties due to economic constraints and many headwinds that have occurred. However, we have also not always had the right hands at the till,” he said.
Over the longer term, there’s clearly a need to improve the ethical standards of the underperforming municipalities, which feed into service delivery across the country.

In managing the country through the unprecedented global crisis that Covid-19 has been, as business we’ve been most supportive of some of the difficult choices the state has made and understood that there would be unforeseen problems along the way.
But at the state’s touchpoint of its interventions with the most vulnerable in society sit municipalities that threaten to undo all their best-laid plans. The cost of poor financial management in a country in recession and facing the Covid-19 pandemic will be very high.

This opinion piece was first published in Business Day