DA wins precedent setting case against Matjhabeng

23 October 2024

The Democratic Alliance (DA) has won an important case against Matjhabeng Local Municipality and the Free State provincial government, which confirms that the provincial government has a constitutional obligation to intervene in municipalities that fail to meet the financial management requirements of the Municipal Finance Management Act (MFMA).

The Free State government will now have to prepare a financial recovery plan for the Matihabeng Municipality, including complying with its duties to make requests to the Municipal Financial Recovery Service of the National Treasury and consult with the Mayor of the Mathabeng Municipality under section 139 of the MFMA and within six months of this court order, file a copy of the financial recovery plan with this Court.

If the municipal council then fails to approve legislative measures, including a budget or any revenue-raising measures, necessary to give effect to the recovery plan, the Premier of the Free State Province, the Member of the Executive Council for Human Settlements, Cooperative Governance and Traditional Affairs, Free State Provincial Government and the Provincial Executive of the Free State Province, alternatively, the Minister of Cooperative Governance and Traditional Affairs, President of the Republic of South Africa and the National Executive must:

Dissolve the council of the Mathabeng Municipality, appoint an administrator until a newly elected council for the Matihabeng Municipality has been declared elected, and approve a temporary budget or revenue-raising measures or any other measures giving effect to the recovery plan to provide for the continued functioning of the Mathabeng Municipality; or

Assume responsibility for the implementation of the recovery plan to the extent that the Matihabeng Municipality cannot or does not otherwise implement the recovery plan.

This will ensure that financial discipline is imposed on the municipality that will be a first step to its recovery.

The DA is aware that under ANC rule the municipality had become the one local government that owes the single most to a water board in the entire country (R7 billion), with basic service provision coming almost to a complete stand-still. This will take time to recover from.

However, this court victory of the DA on behalf of all the residents of Matjhabeng will ensure that where municipalities in the Free State do not exercise financial discipline, the provincial and national government do not have the option, but the obligation, to intervene with a proper financial recovery plan.

The ANC in the Free State now have a choice: come up with and implement a realistic financial recovery plan for Matjhabeng, or risk having it dissolved where it will almost certainly not get more than 50% of the votes in an election here, as we have seen in 2024.

The DA will closely monitor the implementation of the court order.

Issued by Goerge Michalakis, DA Constituency Head: Matjhabeng Local Municipality, 23 October 2024