South Africa: Local Development in an Uncertain Partnership

South Africa: Local Development
in an Uncertain Partnership
At the heart of South Africa’s response to its high unemployment, poverty
and large wealth disparities is the insistence that local government is the key
to development and delivery of basic public services. As a result, municipalities
operate in an intricate and rapidly changing partnership with South
Africa’s nine provinces.
The Constitution establishes and demarcates nine provinces, each with an
elected provincial legislature and a provincial executive. The local sphere of government
consists of 283 municipalities, headed by elected municipal councils.
Prior to 1994, local government as an institution was subservient to the
whims of national and provincial politics. Moreover, it was racist and illegitimate.
White local authorities were fully-fledged municipalities comprised
of central business districts surrounded by opulent suburbs. However,
black, coloured and Indian local authorities were deprived of power and
resources. Their jurisdictions had no tax base and they were dependent on
hand-outs from the apartheid government.
The post-apartheid Constitution of 1996 firmly establishes local government
as a distinct sphere of government. It provides for two forms of local
government, namely single-tiered metropolitan local government and two-
34 Jaap de Visser
tiered non-metropolitan local government. The introduction of a special
dispensation for metropolitan local government was needed to facilitate
city-wide development, planning and redistribution within large cities. The
Constitution envisages a broad development mandate for local government
aimed at dealing with the disparities caused by apartheid. Local government
is equipped with specific powers protected by the Constitution. National and
provincial governments may circumscribe these powers but have to leave
sufficient space for municipalities to make their own decisions.
Municipalities enjoy constitutionally-guaranteed taxing powers as well as an
entitlement to an “equitable share” of nationally generated revenue. On average,
local government raises about 85 percent of its revenue through local taxes
and user charges. Provinces raise about 3.5 percent through their own revenue.
This creates an important dynamic in the relationship between provinces and
municipalities. A formula-based equalizing grant determines the equitable share
while conditional grants further complement a municipality’s income. The
administration of grants is almost exclusively done by national government.
The aggregate size of the overall local government budget in South Africa has
nearly doubled over the past four years. The six metropolitan municipalities
account for 57.4 percent of the total local government budget. Many municipalities
are able to fund their operating budget with their own revenue but capital
projects are dependent on national government funds. Commitment to local
government is evidenced by a steady increase in intergovernmental allocations.
Both provincial and national governments have the authority to monitor
local governments’ performance. Financial management legislation requires
intense and regular financial reporting of municipalities to national and
provincial treasuries. When there are general failures on the part of a municipality
to implement legislation or to ensure adequate financial management
and budgeting processes, provinces may intervene in the form of a provincial
takeover, the dissolution of council or even the imposition of a budget.
Intergovernmental relations in South Africa are guided by a conceptual
framework of “cooperative government.” Cooperative government deals
with both the autonomous and the integrationist dimensions of intergovernmental
relations. An Intergovernmental Relations Framework Act has
recently been adopted to provide an overall framework for intergovernmental
relations. It secures local government representation at key national
and provincial intergovernmental relations structures. Organized local
government is recognized as a voice for local government in provincial and
national policy and law making. It is represented in the second chamber
of Parliament (National Council of Provinces) by a non-voting delegation.
In practice, organized local government has not yet succeeded in ensuring
effective input in Parliament and is struggling to represent both underresourced
rural municipalities and first class metropolitan giants.
South Africa’s commitment to mitigating the centrifugal dynamics associated
with decentralized planning has resulted in an ambitious framework for inter-
South Africa 35
governmental planning and budgeting. Municipalities are required to draft
comprehensive strategic plans that link local, provincial and national planning
together in an integrated government plan for the municipal area. The
rationale is that all governmental service delivery and development takes
place within a municipal jurisdiction.
Recent trends point towards the diminished autonomy
of local government. The intensification of
financial oversight, exercised mainly by provincial
governments, is prominent. Also, municipalities
are becoming more dependent on intergovernmental
grants for infrastructure development. This
trend, if not reversed, may frustrate the achievement
of the ideals of localized priority setting.
The role of district municipalities in the system
of two-tiered local government is controversial. In
2000, district municipalities suddenly acquired
jurisdiction over urban centres in an attempt to
redistribute resources from urban centres to rural areas. However, district
municipalities appear to lack the financial clout to make this happen.
Another complicating factor is the division of functions between the two tiers.
The division presents a confusing picture where districts are both coordinating
agents and service deliverers. Finally, the big urban centres enjoy a troublesome
relationship with their district municipalities. The lopsidedness of an
urban giant being coordinated by a district municipality is giving rise to ideas
of abandoning the notion of two-tiered local government in those areas.
These discussions take place against the backdrop of a rethinking of the role
of provincial governments sharpened by the rise of a strong local government.
Provincial government is the sphere of government that the African National
Congress is the least comfortable with. The role of district municipalities and
metropolitan municipalities will feature prominently in this discussion. The
financial, political and economic clout of metropolitan municipalities almost
equals that of provinces. District municipalities are in dire need of a new sense
of purpose and function, which some may find mistakenly placed in the provincial
sphere of government. Provincial governments will remain in one form
or another. The precise form and function, however, may be subject to change.
The relationship of local governments with their provincial counterparts
is rife with contradiction. On the one hand, the leverage of provincial governments
over local government has been hollowed out by the transfer of grant
disbursement to the national government from the provincial government.
On the other hand, provincial treasuries are emerging as effective financial
monitoring entities. Indications are that provincial governments and municipalities
are establishing workable relations. A reasonable prediction is that
provincial governments are indispensable in integrating the country’s 283
municipalities into one national development agenda.
In practice, organized
local government has
not yet succeeded in
ensuring effective input
in Parliament and
is struggling to represent
both underresourced
rural municipalities
and first class
metropolitan giants.