Share

Bryan Britton: Local Municipality deficiencies need ‘Einstein’ moment come August

This story has been updated with the right of reply of Charl Kocks of Ratings South Africa.

Mr Kocks writes: Ratings Afrika is misquoted in an extremely serious manner in the article by Mr Bryan Britton on BizNews 29 April 2016.

He states “The current ANC political leadership in control of the majority of municipalities has demonstrated over the last five years, and more, to not being capable of sound governance. This is the main cause of their low financial sustainability,” Ratings Afrika said.” (My colouring and bolding added.)

The fact is that Ratings Afrika did NOT name a political party.

Read below the full right of reply on the this article.

With the local municipal elections set for 3 August, author Bryan Britton takes a look at their overall performance. He uses the Ratings Afrika’s Index, which evaluates the operating performance, management of liabilities, budget practices and liquidity position of municipalities, and scores each component out of 100. The number’s aren’t flattering, and the expectation is that service delivery and quality of living will deteriorate in South Africa over the short and medium term. – Stuart Lowman

By Bryan Britton*

“Insanity: doing the same thing over and over again and expecting different results.

    Albert Einstein, German-born physicist (1879 – 1955)”

Ratings Afrika’s Index evaluates the operating performance, management of liabilities, budget practices and liquidity position of municipalities, and scores each component out of 100.

Of the 100 municipalities analysed by the group, 60 scored an average under 50% – 42 of which scored under 35%.

The country had an average score of only 43% – a position it has maintained over the past five years, indicating inadequate financial management practices and discipline, which the ratings group pins squarely on the ANC.

“The political leaders of the municipalities in South Africa, whose responsibility it is to govern, have failed in the majority of municipalities, as reflected by their weak financial sustainability,” the group said.

“The same thread is visible in many state-owned entities such as Eskom, SAA, Post Office and the SABC, where financial weakness is largely caused by weak financial governance on behalf of the political leaders and management in charge of these entities.”

“The sad reality is that this weak financial governance is also prevalent in Central Government, which is now threatened with sovereign rating downgrades by the world’s leading rating agencies,” Ratings Afrika said.

Read also: Analysis: By-election trends suggest DA to govern Joburg, Tshwane in 2016

According to the report, of all South Africa’s major metros, the City of Cape Town is the most financially sustainable, with a score of 75%. This is followed by Buffalo City (Eastern Cape) with 73% and Ekurhuleni (Gauteng) at 70%.

Ironically, Tshwane and City of Johannesburg (Gauteng) are the worst-run metros, despite being the wealthiest – managing a score of only 24% and 37%, respectively

“This reflects severe deficiencies in their budgeting practices and financial discipline,” the group said.

SA provincial financial sustainability score (out of 100) – 5 year review

province stats
province stats



SA metros financial sustainability score (out of 100)

metro stats

According to Ratings Afrika, the expectation is that service delivery and quality of living will deteriorate in the country over the short and medium term.

“The current political leadership in control of the majority of municipalities has demonstrated over the last five years, and more, to not being capable of sound governance. This is the main cause of their low financial sustainability,” Ratings Afrika said.

Mr Einstein please guide us in the upcoming Local Municipal Elections.

• Bryan Britton is the author of ‘Stepping Stones’

Right of reply: Charl Kocks of Ratings Afrika

Ratings Afrika is misquoted in an extremely serious manner in the article by Mr Bryan Britton on BizNews 29 April 2016.

He states:

“The current ANC political leadership in control of the majority of municipalities has demonstrated over the last five years, and more, to not being capable of sound governance. This is the main cause of their low financial sustainability,” Ratings Afrika said.” (My colouring and bolding added.)

The fact is that Ratings Afrika did NOT name a political party. This is because the party in control is NOT always the ANC; but more importantly, the sentence is to underscore that the politicisation of municipalities is (in a majority of cases) is now affecting their ability to act appropriately; and there are multiple facets to that statement.

We strive to remain apolitical in our analyses, which is a critical factor of our business sustainability; and in one fell swoop Mr Britton and your news service has damaged this. I regard this to be extremely unfair and journalistically dishonest.

As Step One, please correct this very serious error very publicly; and please do so also at the level of Fin24 who lifted your article.

With great disappointment.

Kocks’ second email reads: 

Thank you for what I regard as Step One, namely removing the letters ‘ANC’ from the quotation from our press release, both on BizNews and on Fin24.

As mentioned, what happened was not only wholly unacceptable (to put it mildly) but also hugely damaging in both reputational and business terms. Ratings Afrika must at all times act impartially, and be seen to act impartially; and especially in an area like municipal sustainability and service delivery, heightened by the fact that municipal elections are in the offing, needs to be respected as a non-partisan commentator and remain completely out of party politics. We have achieved this throughout since CA-Ratings first published its Assessments of Debt Governance for the municipalities almost 20 years ago, and we remain steadfast in this respect.

In this context, in order to settle this matter, we request most strongly that as Step Two you publish on BizNews and on Fin24 in a prominent manner (specifically, no less prominent than the manner wherein the article(s) appeared) and for no shorter period than the articles were carried, unambiguous wording that achieves the following:

  1. Sets out the misleading quotation and the fact that Ratings Afrika at no time made such a statement or inference; and

  • Clarifies that Ratings Afrika has made it abundantly clear that it remains apolitical in all respects, as it has always been.
  • We request that you provide us with the draft wording of the retraction and clarifications before publishing them.

    We reserve all our rights in respect of this matter.

    * For more in-depth business news, visit biznews.com or simply sign up for the daily newsletter.

    We live in a world where facts and fiction get blurred
    Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
    Join News24 today
    heading
    description
    username
    Show Comments ()
    Rand - Dollar
    18.94
    -0.9%
    Rand - Pound
    24.10
    -0.9%
    Rand - Euro
    20.59
    -0.7%
    Rand - Aus dollar
    12.42
    -0.9%
    Rand - Yen
    0.13
    -0.8%
    Platinum
    915.75
    -0.8%
    Palladium
    1,028.36
    -3.5%
    Gold
    2,159.96
    +0.2%
    Silver
    25.03
    -0.6%
    Brent Crude
    85.34
    -0.1%
    Top 40
    66,252
    0.0%
    All Share
    72,431
    0.0%
    Resource 10
    53,317
    0.0%
    Industrial 25
    100,473
    0.0%
    Financial 15
    16,622
    0.0%
    All JSE data delayed by at least 15 minutes Iress logo
    Company Snapshot
    Editorial feedback and complaints

    Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

    LEARN MORE
    Government tenders

    Find public sector tender opportunities in South Africa here.

    Government tenders
    This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
    Browse tenders