From tax to tech: What it takes
to fix municipalities

Municipal debt is a pressing issue in South Africa, with local governments facing significant financial distress which has resulted in a cycle of financial instability that threatens the delivery of essential services.

The debt owed by municipalities totals over R100-billion, with local governments owing substantial amounts to various entities, including water boards and state-owned power utility Eskom. Pemmy Majodina, minister of water and sanitation, recently revealed that water boards have outstanding municipal debt of about R130-billion while National Treasury figures show that municipal debt to Eskom has surged to almost R110-billion.

Such high levels of municipal debt mean that municipalities may be at risk of being unable to provide basic services, maintain infrastructure or upgrade facilities. Similarly, they may also not have enough cash to fulfil their responsibilities.

However, digital transformation offers a promising path forward for SA municipalities to address their financial challenges and ensure long-term stability. By embracing technology-driven governance, municipalities can enhance service delivery, improve financial transparency, and achieve sustainable financial health.

By leveraging technology, municipalities can streamline billing systems and reduce outstanding debt. Automated revenue systems and AI-driven analytics can optimise billing processes, ensuring timely and accurate collection of dues.

Digital tracking and reporting tools can enhance accountability and transparency in municipal finances. Blockchain technology, for instance, can provide a secure and transparent ledger for financial transactions, reducing the risk of fraud and mismanagement.

Smart technology can also improve resource management by enhancing efficiency and curbing wasteful expenditure. Internet of Things (IoT) devices and data analytics can monitor resource usage in real-time, enabling municipalities to make informed decisions and reduce costs.

To effectively embrace innovation, technology and digital transformation, municipalities should consider outlining a comprehensive digital transformation strategy that aligns with their financial and operational goals. This strategy should include specific objectives, timelines, and measurable outcomes to track progress.

Building robust digital infrastructure is critical for supporting technological advancements. Municipalities should invest in modern IT systems, secure data storage and reliable internet connectivity to enable the seamless implementation of digital solutions.

Collaboration with technology providers, academic institutions and private sector partners is key as it can accelerate digital transformation efforts. Municipalities can leverage external expertise and resources to develop and implement innovative solutions.

At the same time, training and upskilling municipal employees is essential for the successful adoption of digital tools. Municipalities should provide continuous training programmes to ensure staff are proficient in using new technologies and can maximise their benefits.

Ultimately, digital transformation should focus on improving the overall experience for citizens. Municipalities should prioritise solutions that enhance service delivery, increase accessibility and promote transparency in governance.

Several municipalities have successfully implemented digital solutions to address financial challenges. For example, the eThekwini Municipality, in KwaZulu-Natal, has adopted digital platforms to improve service delivery and financial management.

Specifically, the municipality has implemented the Microsoft Office 365 Enterprise Digital Transformation Programme to enhance communication and collaboration among municipal staff. This has streamlined internal processes, improved efficiency and facilitated better decision-making.

The municipality has also adopted smart city technologies to monitor and manage urban infrastructure. This includes the use of IoT devices and data analytics to optimise resource usage, reduce costs and improve service delivery.

Digitalisation presents an unparalleled opportunity for municipalities to overcome the debilitating challenge of municipal debt. Successful implementations demonstrate the transformative potential of embracing innovation to achieve financial stability and improved service delivery. By embarking on this journey, municipalities will not only secure their financial futures but also ensure that they can meet the needs of their communities effectively and efficiently.

Call for stringent qualification requirements

The residents of SA’s municipalities rely on their local government leaders – municipal managers and chief financial officers (CFOs) – to ensure that their communities thrive through effective governance, financial management, and superior service delivery. Unfortunately, many municipalities are currently facing a serious challenge: leadership roles are often filled by individuals who lack the qualifications and expertise necessary to navigate the complexities of municipal administration.

This problem has led to poor financial management, stalled infrastructure projects, and declining public trust in local government. To counteract this, Munsoft is offering a clear plan to transform local governance.

Municipalities in SA are struggling due to a lack of consistent qualification standards for key positions. This has resulted in leadership that often lacks the necessary skills to manage finances effectively or drive projects to completion.

Without stringent qualifications and regular skills assessments, municipalities are stuck in a cycle of financial mismanagement and poor service delivery, which erodes public trust and hampers economic progress.

A clear path to better governance

Munsoft is implementing minimum qualification standards for municipal managers and CFOs, combined with regular skills audits. This is not just about ensuring that candidates meet the minimum criteria; it’s about ensuring that they possess the right skills and experience to lead effectively.

By introducing these standards and audits, we can ensure that the individuals responsible for municipal finances are properly equipped to lead their communities. This system will identify skill gaps, enabling municipalities to provide tailored training, mentorship, and development opportunities that will foster greater competency and professionalism.

Actionable steps for a stronger local government

The solution is clear. We need to set and enforce minimum qualification standards for Municipal Managers and CFOs. Alongside these standards, regular skills audits will provide municipalities with the insights they need to develop their leaders and ensure they are up to the task.

These audits will help pinpoint areas for improvement, and by using the results, municipalities can create personalised development programs that will help elevate their leadership teams. This process will foster better decision-making, stronger financial practices, and, ultimately, improved public service delivery.

Now is the time for government bodies like the Department of Cooperative Governance and Traditional Affairs (COGTA) to take decisive action. We urge these departments to enforce these qualification standards across all municipalities. By doing so, we can ensure a consistent approach to good governance, improve service delivery, and rebuild public trust.

The future of SA municipalities

The implementation of minimum qualifications and regular skills audits will lead to municipalities that are more transparent, accountable, and capable of delivering essential services to their communities. With skilled and qualified leadership, municipalities will be better positioned to ensure sound financial management, strategic initiatives, and greater economic stability.

Ultimately, this initiative will transform local governance across SA, creating stronger, more resilient municipalities that meet the needs of their citizens.

We must collaborate with professional organisations and academic institutions to ensure that qualification standards and skills audits remain relevant and impactful. This is the only way we can ensure that local governance evolves to meet the demands of today’s digital and complex world.

Munsoft is committed to supporting this shift toward stronger, more accountable municipal leadership. By working together, the company says it delivers meaningful impact on service delivery and governance, ultimately improving the lives of all South Africans.