The Deepening Crisis of Makana Municipality: Unspent Funds and Service Delivery Paralysis

In the Eastern Cape's beleaguered Makana Local Municipality, a financial predicament looms large over Makhanda (formerly Grahamstown) as the National Treasury orders the repayment of a substantial R60.7-million infrastructure grant that has reportedly gone unspent. The Eastern Cape Provincial Treasury, closely liaised with Pheello Oliphant, the spokesperson for the MEC Zolile Williams, is urging a reconsideration of this decision, cognizant of the dire consequences for the residents.

Makhanda's challenges are emblematic of the wider scenario of financial disarray, poor governance, and infrastructure atrophy facing many municipalities within the Eastern Cape. Potholes, dry taps, and dilapidated streets reflect the severe service delivery failures. The provincial government has remarkably opposed dissolving the municipal council amidst these issues, insisting, instead, on support mechanisms.

Shockingly, with a collection rate of around 87%, Makana's financial instability is laid bare through a cost of employment figure of 38%, exceeding the Treasury standard by 3%. Yet, in comparison with other municipalities, like Intsika Yethu, Makana seems to perform better, highlighting the pervasive and system-wide dilemma.

Finance MEC Mlungisi Mvoko's grim depiction of the province's municipalities' status confirms the dire financial health, governance woes, and service delivery inefficacies, emphasized by elevated expenditure, swollen organizational frameworks, and escalating Eskom and Water Board arrears.

Despite the financial recovery plans in motion and an appeal for debt relief, Makana remains in a precarious position. The Auditor-General's recent report underscores this, issuing a disclaimed opinion due to inept financial statement preparation. An alarming fact is that only 33% of set targets for basic service delivery were achieved, propelling continuing water shortages and evidencing past years' poorly maintained infrastructure.

The community's plight culminated in a 2020 High Court case, signaling a constitutional crisis over service provision. Judge Irma Stretch's decision to dissolve the council was challenged, resulting in an SCA agreement for a recovery plan.

Yet, even with the SCA-directed quarterly reporting, the National Treasury's recent directive paves a rough road ahead. The unspent conditional grant threatens to slice the upcoming equitable share allocation, impairing the municipality's essential service operations, including paying salaries.

Added to this is the municipality's alarming decision to auction assets, including a fire truck, which seemingly signals its desperation to balance the books. The Democratic Alliance's stance, voiced through spokesperson Vicky Knoetze, demands an immediate intervention by the provincial government, which reportedly has yet to materialize.