On interventions relating to basic service delivery
Honourable Chairperson,
Let us start by expressing our sincere gratitude to the millions of South Africans that voted in the recently held local government elections. We note with humility their continued faith in the democratic project of building this country and their unwavering hope to the promise of a better life that we all aspire to realise.
With their vote, a social contract to work with their freely elected representatives in order to “improve the quality of life of all citizens and to free the potential of each person” as envisioned in the preamble of our Constitution, has been renewed.
We say this, for it is important to underscore the importance of working together with no politicisation of service delivery, and do so with speed in order to improve the quality of life of the people. Secondly, we reaffirm that all municipalities remain a priority in meeting people’s basic needs.
Access to basic services such as water, sanitation, electricity, and refuse removal is what makes our living spaces liveable. Municipalities are there to ensure that the people’s quality of life and living conditions are of a desired standard that safeguards and guarantees human dignity.
Honourable Chairperson
Our rapid response measures aim to address in good time, any emergent challenges at municipal level to prevent the collapse of services to the people. We do so, for we are mindful of prevalent institutional challenges faced by a number of municipalities.
Some of the areas that require improvement are on leadership capacity, managerial competence, technical and project execution especially in infrastructure projects as well as financial management skills to ensure sustainability of municipalities. Obviously some of these challenges and weaknesses are well documented by the Auditor-General as part of financial and performance audit outcomes.
For instance, in the report on Municipal Audit outcomes presented in July 2021, the Auditor-General confirms that the audit results under the outgoing administration show little sign of improvement from previous administration.
The Department of Cooperative of Governance has identified through the 2021 State of Local Government Report, 64 municipalities as dysfunctional and needing urgent support. These high-risk municipalities are characterised by among others, in fighting, poor and weak decision-making, poor performance, lack of consequence management, poor collection of revenue and poor response to service delivery complaints. Unfortunately, such failures have a ripple effect on finances of municipalities and inevitably, the quality and speed of service delivery.
Therefore, we should look into these performance challenges and provide targeted programmes with a view of improving the performance of municipalities. The Department of Cooperative Governance and National Treasury are working in collaboration with other sector departments, SALGA, provincial governments and municipalities in developing an implementation plan to address the issues identified in the Report. These plans will be implemented as soon as respective councils are sworn into office in the coming days.
One of the critical areas needing prioritisation is in network infrastructure investment and maintenance, especially fixing the crumbling water and sanitation infrastructure. Dilapidated water infrastructure, as well as poorly managed operations and maintenance of new infrastructure in small and major towns, have resulted in the inadequate supply of quality water that impact on people’s dignity and quality of life.
It is for that reason that the Inter-Ministerial Committee on Water and Sanitation exists as an institutional coordinating platform, to respond to institutional weaknesses and challenges in the efficient and effective management and delivery of water services at local government level.
As Parliament, we should prioritise support and improve our oversight function on local government affairs, and work together in ensuring that municipalities have political stability and we focus on people-centred service delivery. Let us not let the people of our country down, let us work together to restore their dignity.
Thank you very much.
On improvement of socio-economic conditions
Honourable Chairperson,
Following the July unrests and violence that led to more than 359 deaths, law enforcement agencies are still busy with investigations against all criminal acts of violence and looting that took place during that period, in line with the dictates of our constitutional democracy that subscribes to the rule of law and equality before the law for every citizen.
There is no justification to mention the names of those accused in this House, as it is a matter of public knowledge that some of those accused of instigating the unrests have already appeared in court. In each of those cases, where there is evidence of criminal conduct, such individuals will be prosecuted in accordance with our laws of justice.
We are pleased that the affected provinces of KwaZulu-Natal and Gauteng are starting to normalise and businesses and logistics networks are back to full operation. Peoples security and livelihoods have been restored.
As for what measures has government taken to ensure the security of the country and its people, the President did appoint a Panel of Experts to conduct assessment of the country’s response to deal with such incidents in the future. Upon the conclusion of its work, Parliament will have the opportunity to engage with the findings and recommendations of thereof.
In the final analysis, the events and subsequent aftermath of the July unrests, is a stark reminder that the project of building and consolidating democratic society that is inclusive and reflective of the aspirations contained in our Constitution, is far from being over.
We would like to acknowledge the support of all social partners in finding practical solutions to the problems on the ground, and who have supported efforts to restore calm in the various affected areas during and post unrest period.
The extent of poverty and inequality in our country especially in the affected communities of Gauteng and KwaZulu-Natal, suggests that we must work together and harder across political divide to deepen anti-poverty programmes in order to ensure that we achieve inclusive growth and we enhance social cohesion. Public sentiment to the possibility of a better South Africa, should be constantly kept alive through concrete improvement to their socio-economic condition. Doing so is in our collective interest.
For as long as the poor feel that the system is leaving them behind and is benefitting only the few, we run a societal risk of allowing a section of society to be easily persuaded into opting out of democratic processes. Therefore, it is incumbent upon all of us, to find shared solutions to ensure that such incidents are never repeated.
Thank you very much.
On interventions to address Eskom capacity challenges
At the presidential level, we have two coordinating structures established by the President to address prevailing challenges within Eskom and other State-Owned Companies.
The first is the Eskom Political Task Team chaired by the Deputy President, which continues to provide political leadership and support to ensure that Eskom is able to meet its obligation of providing electricity; and that Eskom implements a credible and transparent national maintenance programme to ensure that power generation plants operate at optimal levels to reduce negative impacts of electricity supply disruptions.
The second coordinating structure, is the Presidential State-Owned Enterprises Council established to reposition and strengthen the governing framework of state-owned companies as well as address their liquidity challenges including implementing turnaround strategies.
Whereas, the Eskom Political Task Team serves as an institutional coordinating platform that brings together key players within government, to provide leadership and technical assistance towards the resolution of challenges facing Eskom; the Presidential State-Owned Enterprises Council focuses on prioritisation of critical state-owned companies that have a greater impact on the economy.
In the main, the Presidential State-Owned Enterprises Council identifies specific interventions to stabilise and strengthen the State Owned Enterprises’ financial and operational performance, reduce reliance on the fiscus, and ensures they are repurposed to align with national priorities.
Honourable Chairperson,
Both these structures are working towards assisting Eskom to develop decisive interventions to address their poorly performing generation business and other persisting challenges. We must stress that the challenge at Eskom has not been with the quality of advice or plans, but rather the resources, services, and funding required in implementing interventions on power generation. It is therefore, our view that an additional Panel of Experts shall not improve the situation, and we remain open to specific ideas that can contribute to further improvements.
Equally, the Board of Eskom has been urged to review existing weaknesses that continue to affect performance of the utility and ensure that we resolve operational challenges. The Management of the utility is also doing its best to focus on intensive maintenance and management of the aging power generation fleet to avoid breakages that lead to collapse in generation and ultimately power outages.
As government we are cognisant of the impact and inconvenience of inadequate electricity supply on people’s daily lives and its devastation to the country’s economic growth. Collectively, this undermines development and delivery of critical services on predictable basis across society. Honourable Members should rest assured that measures are being undertaken to ensure that the negative impact of load shedding is minimised in order to avoid the total collapse of energy-intensive economic sectors such as mining and manufacturing.
Within the framework of the Integrated Resource Plan, alternative energy generation measures are also being explored and implemented to augment electricity supply and improve the stability of the grid upon their completion. The Minister of Mineral Resources and Energy recently announced the preferred bidders for the Renewable Energy Independent Power Producers Procurement Programme Bid Window 5. The 25 projects in this latest round of Independent Power Producer procurement will eventually add the much needed 2,583 megawatts capacity of renewable energy to South Africa’s grid.
To address the Honourable Member’s question on whether the government has considered moving Eskom from the Department of Public Enterprises to the Department of Mineral Resources and Energy, discussions are currently underway as part of a broader government effort to improve the management of parastatals. The re-organisation, once finally decided, would better align companies such as Eskom on their mandate.
The Presidential State-Owned Enterprises Council will advise government on the appropriate shareholder models and repositioning of the state-owned companies as effective instrument of economic transformation and development. In this regard, we should await the finalisation of the Presidential State-Owned Enterprises Council work, for further guidance.
As government, we continue to engage with key stakeholders to address any implementation bottlenecks and challenges in our efforts to provide stable energy which will stimulate sustainable economic growth. Private sector experts are also invited to share expertise and experience across a number of key performance areas that the Eskom Political Task Team is seized with.
Thank you very much
On the impact of recent unrests on elections
Honourable Chairperson
As already indicated, as government we have taken stock of the challenges that are continuously confronting our municipalities. To this end, the Minister of Cooperative Governance and Traditional Affairs in July this year tabled the report on the State of Local Government before Cabinet as well as the Portfolio Committee on Cooperative Governance and Traditional Affairs.
The Report confirms the correlation between failures in governance and political oversight as the primary causes underpinning the increase in the number of dysfunctional municipalities.
In the main, these challenges relate to inefficient financial management and governance systems, poor delivery of basic services like water and sanitation, electricity, equitable provision of sustainable human settlements, and crumbling and dilapidated infrastructure.
As part of focused government interventions, the Department of Cooperative Governance and Traditional Affairs in collaboration with the provinces, SALGA and National Treasury, has developed a framework to guide the process of developing, implementing and monitoring the Municipal Support and Intervention Plans in the 64 municipalities identified as dysfunctional.
It is envisaged that as commitments made in these plans are being implemented, service delivery will improve thereby reducing the prospects and or frequency of service delivery protests. We remain optimistic that the coming Local Government Lekgotla, which will be attended by the incoming local government leadership, will come up with innovative solutions to implement Municipal Support and Intervention Plans.
We must stress that whilst the delivery of basic services remains the competence of local government, the reality of coalitions that will emerge out of these elections especially in hung municipalities, would necessitate that where applicable, national and provincial governments guide and intercede where the availability and quality of services is faltering due to capacity constraints.
Honourable Chairperson
As for low voter turnout, we are not in possession of any empirical evidence which suggests that poor service delivery especially by outgoing local government administration, has resulted in low voter turnout during these elections. In fact, there are many variables including the ongoing Covid-19 pandemic and related risk-adjustment restrictions. This is a trend elsewhere in the world where elections were conducted under similar conditions. The fact that people did participate, is an illustration of their commitment to democracy. That is what we must build on.
Having said that, it is important to point that as we were campaigning for our parties, some of the criticism levelled at us as leaders, is of our own making. We get preoccupied by our own responsibilities of office as members of parliament, members of the executive or as mayors and councillors, thus spending less time talking to the people and responding to their needs.
Leaders must listen to the people and respond to the issues they raise that affect them at community level. In our view, all leaders must make themselves available to be at the service of the people and work to unite our communities. People are looking for collaborative approach by parties that places their needs at the centre as opposed to party agendas. To improve the situation, the arrogance of leadership must give way to humility.
We continue to work hard to restore the confidence of the people by implementing municipal interventions that government has put into place.
Thank you very much.
On government’s reconstruction and Recovery Plan
The President first presented the Economic Reconstruction and Recovery Plan to a Joint Sitting of Parliament in October 2020. Since then, government has achieved substantially in supporting township and rural economies.
We wish to apprise the Honourable Member that in February 2020, Cabinet approved Township and Rural Entrepreneurship Programme as championed by the Department of Small Business Development. This Fund was developed as a response to the urgency of the need to roll out appropriate support to small businesses in townships and rural areas.
Through the programme, qualifying small enterprises are provided with financial and non-financial support to empower them to run their businesses in a profitable manner and also help them to acquire business equipment, tools and machinery with a view to increase their capacity to access economic opportunities and enhance their competitiveness.
As of 31 October 2021, 289 products manufactured by Small Medium and Micro Enterprises have been placed on the shelves of major retailers and wholesalers in the country as part of the localisation programme. These products were manufactured by a total of 45 small businesses, creating over 700 jobs.
It is the government’s vision that through this Programme, more products will be locally produced by small businesses for supply to local and global markets and create more job opportunities. At the same time, we need to encourage the public to buy goods produced locally, as this will increase sustainability and competitiveness of these businesses.
In addition to the above initiative, the Department of Small Business Development through its entity SEDA, has established 54 branches through a district-based development approach to align support to the district economic sectors, thus bringing services closer to the entrepreneurs.
It has, however, been realised that there are still a number of areas where entrepreneurs are still traveling longer distances to access these services, which is why SEDA is in the process of establishing additional service points. This includes considering alternative mechanisms such as mobile offices to increase access. Furthermore, the Department is establishing more incubation centres and digital hubs across the country, to add to the 110 currently existing to supporting township and rural based enterprises.
We are pleased that most Provinces have begun are practically implementing economic empowerment models to boost township and rural economies. Our view is that, at national level, there is demonstrable willingness to consolidate and upscale these initiatives. We, therefore, remain committed to ensure that local economic development initiatives are realised, and that they achieve the empowerment of ordinary people in areas where they live.
We have always maintained that the critical pillars of our country’s industrial policy is a structured focus on the development of new economic centres through special economic zones and industrial parks that are geared towards attracting private sector investments to boost the growth of local economies especially in the townships and rural areas.
This entails the revitalisation of existing industrial parks and sites that link small businesses, especially those owned by women and the youth, to global economic value chains. To this end, the Department of Trade Industry and Competition has a Critical Infrastructure Programme that has at 31 March 2020, supported 12 industrial parks with R690 million for phase 1 of refurbishment. The focus of the initial phases of the revitalisation programme is on infrastructure provision of roads and security upgrades, installation of sewerage, water, and electricity infrastructure, and refurbishment of top structures.
Investing in industrial parks will assist SMMEs located in townships and rural areas to contribute to economic growth. Government has ensured that all SMMEs contracted in developing these industrial parks are local enterprises. This is in realisation that some of the key challenges in the township and rural economies that are face by our SMMEs in particular and entrepreneurs in general, include among others, the lack of economic infrastructure, poor access to markets, restricted trading spaces, logistical constraints and uneven provision of municipal services.
Therefore, we are approaching this matter from a perspective that as things stand, township and rural economies are restricted from realising their full potential by a variety of historical impediments. Revitalising the rural and township economies requires focus on the twin objectives of investing in economic infrastructure and investing in enterprise development.
Thank you very much.
On fighting corruption
Honourable Chairperson,
This government remains committed to fighting any forms of corruption, fronting and or collusion to ensure fairness in the processes of state procurement.
To this end, provisions regarding the procedure for restriction has been provided for in various practice notes and or instruction notes and other legislative provisions. These prescripts provide specific instructions to the Accounting Officers and Accounting Authorities on the restriction process.
In this regard, if a court of law convicts a person of an offence, as contemplated in sections 12 or 13 of the Prevention and Combatting of Corrupt Activities Act of 2004, the court may rule that such a person be prohibited from doing business with the State, and be added onto the Tender Defaulter Database. The Accounting Officers and Accounting Authorities must act upon the instruction of the court of law by submitting the documentation to National Treasury.
The intention and purpose of the Restricted Supplier or Tender Defaulter Database is to ensure transparency by combating and curbing abuse in State Supply Chain Management System. We are of the view that the Restricted Supplier or Tender Defaulter Databases is comprehensive but not adequate.
It appears that whilst the system is meant to blacklist those that are defaulting, there is still a need to strengthen the system and improve coordination across all spheres of government and how we manage the database. This coordination includes reporting in order to populate the database with applicable information.
We must emphasise that the responsibility to identify the suppliers or contractors for restriction, rests solely with the Accounting Officers and Accounting Authorities. The National Treasury is only able to upload the data onto the Restricted Supplier Database and the Tender Defaulter Database, based on the instruction received from the Accounting Officers and Accounting Authorities.
Therefore, any failure to institute restriction procedures against suppliers or contractors must result in corrective action against Accounting Officers and Accounting Authorities.
Further intervention underway, is the adoption by Cabinet of the Public Procurement Bill (2020) for processing by Parliament. The main object of the Bill is to regulate public procurement and to prescribe a framework for procurement policy envisaged under section 217(3) of the Constitution.
In its regulations, the Bill will make provision for mandatory actions by Accounting Officers or Authorities in order to combat corruption and fraud within the procurement system. The regulations will also provide the framework for reporting corruption as well as the sanctions that may or can be imposed on any official that does not report corrupt activities in line with the framework.
Anticipation is that these regulations will close any gap that exists in the current regulations when it comes to mandatory reporting or flagging of corrupt activities within the procurement system.
Thank you very much.
Source: The Presidency Republic of South Africa
