Fixing the Basics, Changing Thinking, and Leapfrogging: KZN’s Path to Functional Local Government
Auditor-General’s Scathing Report Exposes Systemic Failures – What Must Be Done
The Auditor-General of South Africa’s (AGSA) latest Municipal Audit Outcomes for 2023/24 confirm a harsh reality that millions of South Africans experience daily: local government is broken.
While the report lays bare systemic failures in financial management, service delivery, and governance, its release coincided with a jarring juxtaposition—President Cyril Ramaphosa’s announcement of the Construction Book 2024/2025, detailing 250 infrastructure projects worth R238 billion, alongside the promise that public infrastructure spending will exceed R1 trillion over the next three years.
This contrast should alarm every citizen. On one hand, the AGSA’s findings reveal a local government system so dysfunctional that R68.4 billion in infrastructure funding failed to deliver reliable water, electricity, or roads. On the other hand, the government is preparing to inject even more money into a system that has repeatedly proven incapable of spending it effectively.
The question, to Minister Velenkosini Hlabisa and all citizens, is unavoidable: Without urgent reforms, how can we trust that this R1 trillion investment won’t suffer the same fate—wasted, stolen, or lost to incompetence?
The AGSA’s report is not just an audit—it is a five-alarm warning. If South Africa does not fix the basics, overhaul governance, and enforce real accountability, these ambitious infrastructure plans will remain ink on paper, while service delivery collapses further, businesses struggle, and public anger grows. The time for bold, systemic change is not tomorrow—it is now.
AGSA head Ms. Tsakane Maluleke (CA) delivered a stark assessment: “Communities are yet to experience quality service delivery through new and well-maintained infrastructure, despite the national government making available R68.4 billion for infrastructure projects in 2023-24.”
Her words highlight a fundamental truth: money alone cannot fix South Africa’s local government crisis. The problem runs deeper—it is a crisis of leadership, accountability, and political will.
The State of Municipal Governance: A System in Collapse
The AGSA’s findings for KwaZulu-Natal municipalities are alarming:
§ Only 16% of municipalities received clean audits, meaning the vast majority have serious financial mismanagement.
§ 31% were dysfunctional, with little to no credible financial reporting.
§ Billions in infrastructure funding are wasted due to poor planning, corruption, and neglect.
Ms. Maluleke further noted: “Despite continued advocacy for intergovernmental support and collaboration, the opposite is evident in the lack of partnership among the three spheres of government… particularly at metros.”
The Human Cost of Municipal Failure: Three Critical Consequences
Service Delivery Collapses Leaving Communities in Crisis
In Gqeberha, residents of KwaZakhele and Motherwell have endured water outages lasting weeks due to failing infrastructure and mismanagement by the Nelson Mandela Bay Metro. Hospitals were forced to cancel surgeries while residents queued for water tankers.
Johannesburg's permanent electricity crisis sees neighbourhoods like Soweto and Alexandra experiencing daily 12-hour blackouts, while the City spends R400 million monthly on diesel for emergency generators instead of fixing the grid.
The R300 highway in Cape Town has become dangerously potholed, causing over 300 reported accidents in 2023 alone. Similar crumbling roads in eThekwini led to a R1.2 billion backlog in repairs.
Economic Stagnation as Businesses Suffer
A 2023 SACCI survey found 67% of small businesses in municipalities under administration cited infrastructure failures as their biggest constraint.
In Emfuleni (Gauteng), 48 factories closed in 2022-23 due to sewage flooding and power instability, costing 5,000 jobs.
The fruit export industry in Sundays River Valley (Eastern Cape) lost R280 million in 2023 when produce spoiled during prolonged load-shedding and water cuts.
Eroded Public Trust Fueling Social Unrest
Municipal IQ recorded 183 service delivery protests in 2023 - the highest since 2014 - with hotspots like Hammanskraal (where cholera killed 23 due to water failures) and Ditsobotla (North West) where residents burned the municipal office.
Voter turnout in local elections dropped to 46% in 2021, with surveys showing 72% of youth believe "politicians don't care about people like me."
The rise of "DIY governance" - from Soweto's "Operation Buya Mthetho" (community-led service fixes) to Cape Town's "Pothole Patrol" (private sector filling gaps) - shows citizens abandoning faith in official systems.
Why Municipalities Keep Failing: Four Systemic Breakdowns
Capacity Crisis: Only 12% of municipal managers meet minimum competency levels (National Treasury 2023). 78 municipalities (of 257) have no qualified CFO (AGSA 2024)
Financial Mismanagement: R16.2 billion in unauthorized expenditure in 2022/23. Emfuleni Local Municipality spent R2.3 million on a soccer tournament while raw sewage flooded homes
Political Interference: In Maluti-a-Phofung (Free State), three different mayors were appointed in 2023 amid factional battles while water infrastructure collapsed. A 2023 HSF report found 87% of municipal contracts in Limpopo went to politically connected companies.
Accountability Failure: Only 7% of fraud cases reported by AGSA result in convictions (HSRC 2024). In Mangaung, R1.4 billion in irregular expenditure saw zero officials prosecuted.
A New Approach: Accountability, Collaboration, and Smart Governance
The AGSA has repeatedly called for stronger oversight, stating: “We have directed our calls to action to members of the accountability ecosystem in local government… Oversight by provincial legislatures and Parliament remains weak.” (AGSA, 2025)
KwaZulu-Natal decision makers must be mature enough to instill a culture of learn from those who are doing well, even though they are our “political enemies”. Some of the good stories are the following.
The "Good Green Municipality" Model: Overstrand Municipality maintains a 95% clean audit through:
§ Insourcing skilled engineers
§ Strict supply chain controls
§ Community oversight committees
Public-Private Success Stories: Rustenburg's water partnership with Veolia reduced leaks by 37% in 18 months. Johannesburg's "City Power" partnership with private technicians cut repair times by 65%
Technology Leapfrogging: Stellenbosch's AI-powered pothole detection system repaired 4,200 defects in 6 months. Thekwini's smart water meters reduced losses by R60 million annually.
Ramaphosa’s Infrastructure Push – Can It Overcome Municipal Dysfunction?
President Cyril Ramaphosa has positioned infrastructure as a key driver of economic growth, recently stating: “Meaningful infrastructure investment would strengthen the economy, bringing South Africa closer to achieving the NDP’s goals of 5.5% growth, 6% unemployment, and 30% gross fixed capital formation to GDP.”
His administration has secured R238 billion in investments for 250 projects in energy, roads, and water. However, without functional municipalities, these investments risk being squandered like the R68.4 billion before them.
Fix, Change, Leapfrog: A 5-Point Rescue Plan for Local Government
o Emergency Skills Injection: Deploy 250 qualified engineers and accountants to failing municipalities (as done in the COVID health response)
o Direct Community Oversight: Legally mandate community involvement or an open tender system to approve all contracts above R1 million (following the Botswana model)
o Performance-Based Grants: Tie 30% of municipal funding to measurable service delivery targets (Western Cape pilot reduced water losses by 22%).
o Anti-Corruption Fast-Tracks: Establish a dedicated Special Tribunal for municipal corruption with a 6-month case turnaround.
o Infrastructure War Rooms: Joint operations between metros, Treasury, and the private sector to clear maintenance backlogs within 24 months.
Conclusion: From Crisis to Catalyst
The R68.4 billion infrastructure failure isn't just wasted money - it's stolen futures. But examples like Overstrand and Rustenburg prove that turnaround is possible with:
Political will to prioritize people over patronage
Smart systems that prevent looting
Community power to hold leaders accountable
As Auditor-General Maluleke warned: "We audit numbers, but behind each finding are real people suffering." Allowing the mediocre performance to continue unaverted will be met by a repeat of the 2021 riots, where people speak on the streets. South Africa's local government crisis demands nothing less than a complete governance revolution.