2023/24 Budget Vote speech by Minister Thembi Nkadimeng at the Parliament Good Hope Chamber
Honourable Chairperson,
Honourable Members of the Portfolio Committee,
Members of the Provincial Executive Committees,
Fellow Cabinet Members,
Chairperson of the National House of Traditional and Khoi-San Leaders,
Chairperson of the Municipal Demarcation Board and its Members,
President of SALGA,
Organised Labour, SAMWU and IMATU
Director-Generals of DCOG and DTA including the Administrative Staff,
Acting CEO of MISA,
Members of the Fourth Estate,
Distinguished Guests, and
Ladies and Gentlemen:
Introduction
I am sincerely honoured to table budget votes 3 and 15 for the Departments of Cooperative Governance and Traditional Affairs (CoGTA). Joining me in tabling these budget votes are Deputy Ministers Prince Zolile Burns-Ncamashe and Parks Tau.
This budget vote is tabled a day after we commemorated, yesterday, Africa Day and a few days before we begin celebrating Youth Month.
Allow me to say, happy belated Africa Day and happy Youth Month!
We also take this opportunity to recognise and commend our former colleagues, Minister Dr Nkosazana Dlamini-Zuma and Deputy Minister Obed Bapela for ably steering the CoGTA ship since May 2019. Most importantly, we honour the role played by Dr Dlamini-Zuma, working with the President of the Republic, during our dedicated struggle against the Covid-19 global health and economic pandemic.
The gazetted National State of Disasters demonstrated what is possible when the country acts in unison against a common enemy and what can be achieved with cross-sectoral leadership in both the public and private sectors.
This explains why the World Health Organisation (WHO) congratulated South Africa’s Covid-19 response as, inarguably, amongst the best in the world. This simply means we demonstrated our capabilities to save lives and livelihoods. If we can save lives, there is no reason why municipalities should, equally, not be the epicentres for growth, innovation, inclusivity and cohesion.
Therefore, our present mandate seeks to build and accelerate implementation as national CoGTA the developmental and transformative role of local government as envisioned in Section 152 of the Constitution, namely to:
- Provide democratic and accountable government for local communities,
- Ensure provision of services to communities in a sustainable way,
- Promote social and economic development,
- Promote a safe and healthy environment, and
- Encourage involvement of communities and community organisations in local development.
Given our inherited historical legacy and structural challenges in the democratic era, this is a non-negotiable Constitutional mandate we are committed to fulfil and implement.
Honourable Chairperson,
Context
As we table the CoGTA budget votes for debate, detail our departments’ performance outcomes and indicate our spending priorities, we do so under an especially challenging macro-context.
As CoGTA we readily acknowledge the existential challenges which includes, uppermost, the sluggish economic growth, energy crisis, inflation pressures, water insecurity, net effects of the European War, and a depressed fiscal state of municipalities.
This is reason the decision taken by National Treasury is welcomed, as announced recently in their 2023 budget vote that, Treasury undertakes a “conditional write-off of the debt owed to Eskom by municipalities (as an) urgent step taken to stabilise the energy sector”.
On a more negative and sobering note, the developments in Hammanskraal are a dark mark for our democratic dispensation. As CoGTA, we respectfully express our condolences to those families who have lost, needlessly so, their loved ones to the cholera outbreak.
The systematic response of CoGTA to episodes like those in Hammanskraal, to be detailed later in this budget vote speech, includes putting in place the Water Resilience Action Plan which will form the foundation of our Bulk Water Supply and Waste Water Treatment plant infrastructure rehabilitation and energy efficiency interventions within the water reticulation and sewer systems.
Honourable Chairperson,
CoGTA is committed to ensuring that local government is everyone’s business! Allow me to detail the Departmental interventions already made and being made to accelerate implementation, plus measure impact, on a continuity of programmes.
District Development Model
Fortunately, the flagship programme of the 6th CoGTA Administration, the District Development Model (DDM), is making recognisable progress in being institutionalised across the three (3) spheres of government. It cannot be emphasised enough how the DDM, anchored in the Intergovernmental Relations Framework Act, is critical for policy implementation coherence and impact maximisation.
Through the One Plans and One Budgets, we initiated a quality assurance process aimed at assessing the quality of all submitted One Plans. The outcomes of the Quality Assurance process are meant to inform the review and updating of the One Plans across all-district and metro spaces.
Key findings that emerged from the quality assurance process highlighted a need to strengthen the shift towards collaborative, joint-planning and strengthening the involvement of sector Departments, State-Owned Entities (SOEs) and private sector participation.
As CoGTA, we are pleased to see an improved coordination and cooperation between the Offices of the Premier (OoPs) and provincial CoGTAs in the coordination of the institutionalisation and implementation of the DDM.
At the same time, in institutionalising the DDM, we recognise the importance of sincerely engaging and working collaboratively with the Institution of Traditional and Khoi-San Leadership. This is encouraging since it is meant to deal with the less-than-optimal relationship between traditional leaders and municipal councillors.
Hence at the September 2022 Local Government Summit, it was resolved that, SALGA and the National House of Traditional and Khoi-San Leaders, should enter into an immediately implementable Memorandum of Understanding (MoU) to, among others, improve working relations between traditional leadership and municipal councillors. This is an important intervention through which Magoshi and our councillors can pull together their respective strengths and provide the much-needed collective leadership to steer development in local communities.
In all our engagements with the institution of traditional leadership, the issue of socio-economic development in rural communities has continued to take center stage. In this regard, Magoshi have emphasised that there are investible opportunities in their communities which should be leveraged in line with the Invest Rural Strategy to improve the living conditions of people in those areas. During this financial year, we will be giving specific attention to development opportunities linked to mining activities in traditional communities.
We will work close with the institution of traditional leadership, municipalities and the Department of Mineral Resources and Energy to ensure that there is optimum benefit in terms of enterprise development, skills development, procurement, socio-economic development ownership, just to mention a few, as encapsulated in the Social Labour Plans. This is just the beginning because we intend to expand going forward to reach out to all other mining houses operating in traditional communities.
The matter of tools of trade are essential for traditional leaders to perform their functions in an effective and efficient manner. CoGTA is committing to working and engaging with municipalities in ensuring that traditional leaders who serve in municipal councils are provided with tools of trade and other necessary benefits during their term of office, same as what is provided to councillors serving in the same councils.
We will be addressing this matter and we believe that this will also contribute towards harmonising relations between traditional leaders and municipal councillors first and foremost, but also to begin a journey of ensuring that traditional leaders serving in these councils participate meaningfully.
Deputy Minister Burns-Ncamashe will detail the other practical interventions we are making to support decisively the institution of Traditional and Khoi-San Leadership.
Honourable Chairperson,
National interventions
Whilst tangible progress has been made to fulfil our Constitutional obligation to provide developmental and transformation local governance and visible service delivery, we admit there are challenges in ensuring that our people’s growing expectations are met and realised.
These structural challenges, which require national interventions, are rooted in weak institutional capacity, poor governance, poor financial management, corruption, and political instability. This accounts for why a total of 66 municipalities, in 2022, were identified as dysfunctional with challenges across the key performance areas of administration, governance, financial administration, service delivery and Local Economic Development (LED).
As the President of the governing party, Honourable Cyril Ramaphosa, said this year at an ANC January Lekgotla, indeed “the collapse of some municipalities and poor service delivery are related to what has been termed the ‘political-administrative’ interface. This means that many of the issues at municipal level can be laid at the door of elected representatives and we must be proactive and resolute in addressing these issues”.
Nevertheless, we can confidently provide this progress-to-date update. There Department continues to monitor the implementation of national interventions in terms of Section 139 (7) of the Constitution, namely, in Lekwa Local Municipality (MP), Mangaung Metro (FS) and Enoch Mgijima Local Municipality (EMLM) in the Eastern Cape.
In fact, the Mangaung Metro is the first municipality where a coordinated support by national government was implemented. The Departments of Human Settlements, CoGTA, Transport, the Municipal Infrastructure Support Agent (MISA) and National Treasury seconded senior officials to occupy management positions to stabilise the Metro.
Specifically, since the CoGTA / MISA interventions at the Enoch Mgijima Municipality, there have been identifiable improvement in this Municipality in areas of reducing infrastructure backlogs; implementation of integrated infrastructure plans through DDM; and improving performance monitoring strategy.
Equally so, the Lekwa Local Municipality was the first municipality where the national government had to intervene in terms of Section 139(7) of the Constitution. Over the past 24 months, the intervention created the foundation on which the Council will be able to re-build a stable, functional, and sustainable municipality. The municipal Council will be key in providing the leadership and guidance required in this process.
Through MISA, we also continue to support 14 municipalities with the alignment of the Social Labour Plans (SLPs) and their IDPs to improve the implementation and financing of municipal infrastructure programs. These 14 municipalities are: Elias Motsoaledi, Lephalale, Mogale City, Merafong Randwest City, Rustenburg, Moses Kotane, Madibeng, Matlosana, Emalahleni, Steve Tshwete, Matjhabeng, Ga-Segonyana and Gamagara.
The alignment has ensured that the SLP approved projects are prioritised in the municipalities’ IDPs. MISA has signed a Memorandum of Understanding with Wits University to roll out a SLP training program to municipal officials. We urge other public and private institutions to come on board and work with us because service delivery, especially at local municipalities, is everyone’s business and it is in everyone’s interests to make local government their business.
Ladies and Gentlemen,
You will be pleased to know that, in accordance with the DDM mandate, CoGTA aims to stabilise at least 20 dysfunctional municipalities by the end of this financial year. This we will achieve reliant on Section 154(1) of the Constitution which calls on the “national and provincial spheres to support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and perform their functions”.
As I mentioned earlier, national interventions are necessary to address political instability which is partly due to, in some Metros, governance by coalition governments. As you would agree, these coalition governments are characterised by:
- Instability that have a severe impact as it compromises the municipality’s ability to adopt policies and by-laws, make senior management appointments, or even adopt a budget;
- Coalition instability ultimately compromises the municipal administration’s ability to deliver services to local communities;
- Coalitions put strain on the planning of the administration because it is difficult to predict whether items would pass in the council; and
- Local communities continue to bear the brunt of unstable coalition politics.
As CoGTA, what has been our strategic response to these stated challenges?
- There is a need for a framework that can guide political parties and independent councillors on the formation and sustainability of coalitions.
- SALGA developed a guiding Framework for tabling to political parties. The Guidelines dealt with two crucial stages of coalition governments:-
- coalition formation stage – what happens after a coalition is declared hung?
- coalition governance stage – what is needed to promote stability during the life-cycle of the coalition?
The National Disaster Management Centre (NDMC) has completed a review of the National Disaster Management Framework and it is expected that the updated framework will be published for public comment and gazetted in this current financial year. The NDMC has also made significant progress with the review of the Disaster Management System that entails a scholarly gap analysis of the current system and benchmarking against international practices.
The NDMC has, during the flood disasters which occurred in at least four (4) provinces (KwaZulu-Natal, Mpumalanga, North West and Eastern Cape provinces) during April 2022, developed and implemented a coordination system and network to coordinate and manage the response to the disaster. This system comprised of various workstreams that furthered relief and rehabilitation efforts both vertically and horizontally.
The NDMC allocated R516.7 million from the Disaster Response Grants for disaster intervention measures within the affected municipalities in KwaZulu-Natal and Eastern Cape provinces.
The NDMC in collaboration with MISA, the Provincial Disaster Management Centres (PDMC’s) and other relevant role-players, will be continuing to support and monitor implementation of disaster interventions through allocated funding to promote the realisation of desired impacts from the allocated funding.
Additional disaster grant funding will be allocated in support of the qualifying affected organs of state that are unable to deal with the effects of the disasters using their own resources to address the impacts of the floods of 2023.
Honourable Chairperson,
Results-based planning
Given what is stated above, in pursuit of improving and enhancing the delivery of quality and sustainable municipal basic services, the Department adopted a Results-based Planning approach towards the key programmes that will result in meaningful impact. To that effect, a Results-Based Management Office (RMO) is being established (operating like a WarRoom).
Of course, the WarRoom approach is not new to local government. Rather, it is being implemented not only to measure the acceleration of our programmes but gauge how impactful this is done whilst also closing the loopholes as illustrated in what the DDM concept note expects us to do. Therefore, the RMO is a strategic form of professional support through which municipalities will be capacitated to deliver infrastructure and strategic projects in order to drive the necessary enhancements required to improve service delivery.
A primary purpose of establishing a fully functional RMO is to ensure that all the infrastructure and/or strategic programmes produce the intended outcomes. This will be achieved through supporting delivery of projects as well as reporting and monitoring the realisation of the intended benefits during project execution and post the implementation of projects.
The RMO will be resourced through the recruitment and placement of highly qualified, skilled and experienced local government experts and specialist who will be working with municipalities, provincial governments, national sector departments and State-owned entities to bring about the much-needed basic services to communities in all the 9 provinces.
Honourable Chairperson,
Departmental budget allocations
In respect of Vote 3, the Department’s approved budget allocation for the 2023/24 financial year amounts to R121,7 billion. This total allocation is expected to increase at an average annual rate of 5.9 per cent, from R121.7 billion in 2023/24 to R136.5 billion in 2025/26, which will bring the total allocation for the department over the Medium-Term Expenditure (MTEF) period to R387, 7 billion.
The largest portion of this budget is allocated for transfers to municipalities at an estimated R364.7 billion (95.per cent of the total allocation) over the MTEF period. These grants include the local government equitable share (LGES) and the municipal infrastructure grant (MIG), realising an average growth of 7,8 per cent and 4,4 per cent, respectively, over the MTEF period.
The local government equitable share comprises an estimated 81.8 per cent (R309.79 billion) of the department’s spending over the medium term. In this amount is an additional R8.1 billion to compensate municipalities for the increased cost of bulk electricity and water, as well as the MIG allocation being R55 billion over the MTEF period.
In respect of Vote 15, the appropriated budget for 2023/24 amounts to R193,1 million. This allocation is expected to increase to R201,2 million in 2024/25 and R209,7 million in the outer year of 2025/26. Out of this allocation, 25% is a transfer payment to the CRL Rights Commission, which translates to R49,1 million in 2023/24, R49,1 million in 2024/25 and R51,3 million in 2025/26.
Ladies and Gentlemen,
Remuneration matters
On the salient matter of the Independent Commission on the Remuneration of Public Office Bearers, it has published its recommendations on 21 April 2023 recommending a 3.8% increase for all public office-bearers. Thus far, I am in the process of consulting with SALGA and MECs responsible for local government with the view to finalising the upper limits for councillors for the 2021/2023 financial year. We have also requested an audience with the Commission to review the system of remuneration for councillors and traditional leaders.
On a similar matter, I will be publishing revisions to the upper limits for the remuneration of senior managers for the 2022 2023 financial year. My office has also been receiving requests for the waiver of remuneration for senior managers in municipalities due to the limitations of the present remuneration framework and where the remuneration of third-level managers encroaches on and even surpasses the remuneration paid to the senior managers.
The Department, in collaboration with National Treasury, DPSA, SALGA and Provinces, is in the final stages of developing a framework and introduce a revised remuneration system that will do away with this “salary creep” and the need for waivers.
Honourable Chairperson,
Legislative reviews
We have initiated a process to review legislation that impacts on local government with the view to entrenching good practices and to address the challenges that have been experienced.
Intergovernmental Monitoring, Support and Intervention Bill (IMSI): We have developed the IMSI Bill in compliance with the requirements of Section 100(3) and 139(8) of the Constitution. The aim of this Bill is to strengthen the processes and procedures of intervening by the national and provincial governments in provinces and municipalities, respectively.
The Bill will provide unambiguous, clear processes and procedures on how to deal uniformly with the invocation of Sections 100 and 139 of the Constitution. The Bill will also provide legal rights and legalities for all parties concerned, including benefiting the communities in that, when the provincial administration or the municipalities are not fulfilling their executive obligations, then the envisaged legislation will assist by returning these organs of state to normalcy and restoring stability in municipalities across the country.
Inter-Governmental Relations Framework Act (IGR) Review: We will be publishing Regulations in terms of Section 47 of the Intergovernmental Relations Framework Act for public comments. The introduction of these Regulations will be a significant milestone as it will enable all three (3) spheres of government to strengthen their relations through the lens of the DDM.
The regulations will confirm that the DDM is institutionalised within the existing IGR framework as defined in the Act but also makes provision for the establishment of DDM technical structures at national, provincial and district levels.
Specific DDM and One Plan coordination roles and responsibilities are furthermore defined and expanded on in the regulations for national, provincial and district governments and departments. Currently regulations to effect improved inter-governmental collaboration are processed and it is envisaged that these will be gazetted during 2023 for public comment.
Ladies and Gentlemen,
Deputy Minister Tau will elaborate on some of the matters raised above that, indeed, CoGTA is demonstrating in deed and actions that local government is everybody’s business.
Honourable Chairperson,
Evidence-based decision making is central to policymaking and implementation. It is this approach that resulted in government adopting an outcome-based approach and the District Development Model.
As society, we need to do more. We must listen to the voices of our communities. We must respond to the urgent and existential challenges that occupy our citizens and communities. Fortunately, we have within our power the means to accelerate implementation and provide lasting solutions that are impactful and positively change lives.
Why do I preface my remarks in this manner? Please allow me to reference the Human Sciences Research Council (HSRC) in its recent research for the Electoral Commission of South Africa (IEC).
The HSRC found that, on average, the growing critical views of democracy, its institutions and accountability measures, may erode voter turnout at next year’s elections. In fact, “Hope and trust in democracy, its institutions and processes has declined substantially, especially since 2009, reaching an all-time low in 2021, the research revealed”.
In conclusion, you would agree that this HSRC finding alone, demonstrates the need to move towards a result-based planning framework that is developmental and guarantees the change we want to see by 2030.
I thank you.
