The quest for financial discipline at local government level: The regulation of municipal borrowing and financial emergencies
Before the passing of the Municipal Finance Management Bill of 2003, Riekie Wandrag explains, local government confronted a number of issues, including lack of a coherent legislative regulation of municipal borrowing powers, a policy shift from national government guarantees to local responsibility for debt and stagnation of the municipal debt market, combining to produce increasing financial difficulties for local government. She assesses whether the Bill will meet these challenges.
Placing emphasis on preventing municipal financial crisis rather than curing it, the Bill makes it clear that this is primarily the responsibility of municipalities themselves. The Municipal Financial Recovery Service, it is noted, also attempts to regulate and balance (rather precariously at times) the rights and needs of municipalities and their creditors in times of financial crisis.