By Tracy Ledger
[First published in Amandla! magazine]
The current municipal fiscal model is driving both poverty and municipal financial collapse. Current policy approaches are unlikely to deliver a solution.
Approximately 75% of South African municipalities now meet the National Treasury threshold for financial distress. Across the country, municipalities are struggling to find the money to deliver the extensive developmental mandate allocated to them in the Constitution. There is no doubt that, in many municipalities, corruption and the mismanagement of funds are factors contributing to financial distress. The most notable mismanagement is the failure to prioritise the funding of basic services delivery over all other municipal activities in budgets.
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