The impact of new public management on the financial performance of category B municipalities in south Africa

Abstract

The study seeks to evaluate the impact of the New Public Management Model (NPM) on the financial performance of category B municipalities in South Africa. NPM, adopted by African nations in the 1990s, aimed to modernise the public sector through enhanced efficiency and effectiveness. In South Africa, the implementation of NPM was emphasised across all government spheres, particularly at the local level. However, several municipalities continue to struggle with effective governance, financial mismanagement, insufficient budgeting, infrastructure deficits, and poor risk management, which impedes their performance. This research uses descriptive methods. It employs a qualitative research approach, including semi-structured interviews with selected public managers and public document analysis, alongside assessments of municipalities audited financial results. Findings indicate a critical need for institutional transformation to improve financial management and governance. The study recommends that category B municipalities adopt existing norms, standards, statutes, and policies to strengthen financial management and control.