As South Africa faces mounting pressure to restore the functionality and efficiency of its local governments, the second phase of Operation Vulindlela is poised to become a turning point in the nation’s quest for sustainable development.
The initiative, launched as a joint effort by President Cyril Ramaphosa’s office and the Treasury in 2020, now shifts its focus squarely onto the country’s beleaguered municipalities.
Volker von Widdern, Risk Principal at Riskonet Africa, suggests that the risk management community can enhance the success of the initiative, similarly benefit the future of our municipalities—and, by extension, the future of South Africa itself.
“South Africa’s municipalities are at a critical juncture,” notes Von Widdern. “We are not just dealing with risks in the traditional sense; we are confronting the consequences of years of neglect, poor management, and a lack of accountability. Operation Vulindlela offers a rare and vital opportunity to reverse this decline, but it will require the full commitment of the staff and management of local authorities to address the deep-seated issues that have plagued our local governments.”
Operation Vulindlela’s second phase is designed to tackle the entrenched challenges that have long undermined service delivery and stunted economic development at the municipal level. By focusing on enhancing infrastructure, improving fiscal management, and fostering a culture of accountability, this initiative seeks to empower municipalities to better serve their communities and contribute meaningfully to national growth. However, Von Widdern warns that these goals cannot be achieved without a comprehensive understanding of the root causes of the current challenges.
Risk management is not only about the prevention and mitigation of perils, it includes addressing threats to strategic and operational goals. Risk management can support the achievement of organisational objectives by analysing performance metrics and the related threats. Focused performance metrics and proactive response plans should include tracking of cost variations, project delays and performance or quality breaches.
Von Widdern advocates for a strategic approach to risk management at local authorities that includes an analysis of their operating models. He points to the need for local authorities to adopt operating models that align with the specific needs of their communities, delivering services in the most efficient and effective manner possible. “When the unit costs of services, such as waste collection, are substantially higher than the relevant benchmarks, it’s a clear indication that something is seriously wrong,” he said. “This is where corrective action must be taken, and appropriate risk measurement metrics can trigger the required responses to ensure that such action is both timely and effective.”
A key aspect of this corrective action, according to Von Widdern, involves striking the right balance in fund allocation between direct services to communities and administrative overheads. “Certain administrative functions, such as procurement, billing, and collections, are critical. However, the majority of funds collected by local authorities should be allocated directly to the services that meet community needs. This requires a careful evaluation of how funds are distributed during the budget formulation process, ensuring that the needs of the community are met without wasteful expenditure on non-essential overheads.”
Opportunities abound for innovative engagement of communities in the delivery of services. It is clear that SME’s have lower operating costs. Local residents who have (for example) plumbing, road building and electrical skills can be tasked with smaller projects on a capitation basis, thus increasing the value of spend and improving local employment.
Furthermore, Von Widdern highlights the importance of robust financial stewardship and vigilant performance monitoring to prevent fraud and corruption, which often arise from poor procurement procedures. Operation Vulindlela provides a framework for this, but it will take the proactive engagement of all participants, supported by the risk management community, to ensure that the framework is implemented effectively and sustainably.”
Ultimately, the failure of management processes is one of the key sources of risk. Operation Vulindlela seeks to improve management processes and performance. Risk management principles applied at both strategic and operational levels can add substantial value to local authorities. The need for urgent and significant interventions is clear, and the benefits of successful execution will be highly appreciated by the communities.
