cities

Much more needs to be done to make city economies competitive, productive and inclusive. This
means expanding people’s abilities to participate in the economy, through improved education and
training, and access to basic services, as well as enhancing the environment in which firms do business,
through increasing investment in city economic infrastructure. It also means transforming apartheid’s
legacy of dispersed spatial settlement patterns in order to make cities more economically efficient and
inclusive, enabling people to access economic opportunities across the city.
Recommendations
City economic strategies must consider all relevant levers across the entire economic system, not just
the spatial transformation elements. This will require having a deeper and more nuanced understanding
of the spatial and locational factors that encourage firms to invest in certain areas and not in others.
Cities need to develop new skills and expand existing ones required to take the lead in economic
development. These skills include being able to: understand economic metrics and analyse spatial
economic data and intelligence; implement and coordinate an integrated approach across spatial planning,
human settlement and public transport functions; engage with other spheres of government and the
private sector; and create regional development coalitions and partnerships with the private sector.
Cities should do more about securing livelihoods for poor people. This involves having a massive
focus on job creation (private sector, in particular) and scaling up public employment programmes for
people who do not have the education, skills or capabilities to compete in the urban labour market, as
well as accepting informality as a way of doing business. Connected to this is the need to understanding
the informal sector and its links to the formal sector, and how informal entrepreneurs and traders use
city spaces and infrastructure to create economic opportunities and advantages.
The way in which cities are financed needs to be revisited. This is critical to unlocking municipalities as
key economic actors, and means relooking at how nationally raised revenue is divided among government
spheres as well as exploring innovative city financing instruments, such as municipal bonds and city
business taxes. In particular, financing city public transport is the public finance deal breaker in the
economic development system. It is the biggest game changer in South Africa’s efforts to change
apartheid spatial legacy, but its budgetary implications have been left to cities to address.
The critical role of cities in the national economy must be recognised. Such recognition fundamentally
alters intergovernmental dynamics in economic leadership. No longer is the economic agenda solely
a national role. Instead, cities are key partners in raising South Africa’s economic performance and
enhancing inclusive and resilient economic development. Nevertheless, financing urbanisation and
redressing apartheid’s spatial legacy is a national, not local, responsibility. Making cities work,
deepening their inclusivity and strengthening their resilience is critical for South Africa’s economic
story, and for improving the fortunes of all peoples living in the country.
122 State of South African Cities Report 2016