By Rowan de Klerk
Dr. Darion Barclay, Head of the Gauteng Department of Cooperative Governance and Traditional Affairs, recently emphasised that “service delivery improvements will only be possible when local governments prioritise transparency, effective governance, and the needs of the people they serve. Municipalities need capable, accountable, and citizen-centric leadership committed to fulfilling their mandates and improving the lives of South Africans”.
While these improvements are necessary, they will take time to materialise. An alternative solution to bolster financial management is to collaborate with trusted private-sector partners. Strategic outsourcing of specific financial functions to entities with proven expertise in both corporate and public finance can help public institutions enhance their financial oversight without compromising their operational control. The goal is to leverage the efficiencies of the private sector while upholding accountability in public financial management.
Before fully embracing this approach, we must acknowledge its potential pitfalls. Marianna Mazzucato, in her insightful book The Big Con, warns that excessive dependence on private consulting firms can “infantilise” governments, stripping them of their technical capabilities and leading to a loss of independence. When consulting firms hold the reins, decision-making often shifts away from the institution’s leadership, ultimately stifling innovation and internal growth.
What we advocate for, instead, is a hybrid approach that combines the strengths of both sectors. The African Development Bank supports this view, stating that “Public-Private Partnerships (PPPs) can offer complementary sources of finance … while potentially also delivering higher quality and efficiency in public assets and services”. This model encourages skill transfer and capacity building within the public sector, ensuring that expertise is developed internally even as external partners provide valuable support.
One example of effective collaboration is the partnership between South African banks and the Department of Home Affairs. The integration of the banks’ technical capabilities and branch networks allowed Home Affairs to address backlogs and improve service delivery significantly. This success story shows how public-private partnerships can solve complex challenges without diminishing the public sector’s role.
A more targeted example is the South African Revenue Service (SARS), which has worked with private audit firms to elevate tax compliance and governance standards. This collaboration brought in external expertise to tighten fiscal controls, address non-compliance, and boost tax revenue collection, demonstrating how partnerships can enhance both efficiency and accountability within critical public sector functions.