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Key Messages 1 2 3 4 5 Cities have improved their financial reporting and audit findings, and increased their revenue and expenditure significantly. Challenges to municipal financial health include inadequate finance for delivering required infrastructure and services, affordability of municipal services for consumers, corruption, and an increasing administrative burden. Cities should continue to seek operational efficiency gains and improve revenue collection. Cities need to make better use of existing revenue sources and explore innovative financing options, including reforming the current municipal financing model. Cities must balance immediate community development aspirations against longer-term transformation needs. @mikebarwood
Introduction With total expenditure of R164.0-billion in 2014, SACN member cities are collectively responsible for managing larger budgets than any of the individual provinces. Every day they deliver services that affect over 20 million people, or about 40% of the total national population. Municipal officials, councillors, civil activists and others interested and involved in local government have a duty to understand and debate how cities raise and spend their money. In a well-functioning democratic local government system, debates should include whether: • City budgets are appropriate and responsive to local conditions and priority needs. • Budgeting processes are adequately consultative and informed by sufficient analysis of feasibility, cost estimates and risk assessment. • Budgets are translated into a clear enough performance management system to enable accountability through reporting against performance indicators and targets. • Local revenue and taxes are reasonable, serve a redistributive or social justice agenda, and influence citizen behaviour in an appropriate way (through incentives and penalties). • Expenditure achieves service delivery improvements, developmental results, value for money and longer-term sustainability gains. The South African municipal finance management system has matured since the Municipal Finance Management Act (MFMA) (No. 56 of 2003) was promulgated. For the past 10 years, SACN has been measuring and reporting on the financial position and performance of South African city governments. Over this period, the cities have demonstrated improved capacity to manage public funds and achieve expenditure outcomes. They have also developed their financial and performance reporting systems, to enable more immediate and detailed interrogation of results. However, despite these system improvements, cities do not have sufficient financial resources to realise their constitutional mandate, deliver services to the satisfaction of citizens and improve their global competitiveness. They are limited in their ability to fulfil their developmental local government role because of insufficient budgets for new infrastructure to transform the space economy, inadequate revenue-raising opportunities and threats to current revenue sources. Cities may have made progress in planning for the future but do not have the financial freedom to realise these plans, despite calls to devolve funds and functions to cities. Yet, within the intergovernmental system, cities are best positioned to understand the lifecycle costs and benefits of the range of infrastructure investments that influence land-use patterns (including housing, transport, service distribution networks, and social services). They are also best able to understand and anticipate the long-term consequences of spatially targeted investments in peripheral or segregated developments. The municipal finance model needs to be reformed, so that cities can have more autonomy in raising and allocating the funding required to achieve their objectives of resilience, sustainability and shared growth. 7 This chapter was developed using information from the SACN State of City Finances reports. It provides a synthesis of key findings and themes related to the state of city finances over the last 10 years and highlights the financial management challenges that cities continue to face. Finance and Innovation 239
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State of south african cities Repor
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The cities covered in the SoCR Limp
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FOREWORD by the Chairperson of the
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Buffalo city ekurhuleni ethekwini J
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Overview: State of South African Ci
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CH3 PRODUCTIVE CITIES Spatial trans
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INTRODUCTION Our cities: status quo
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State of Cities Reporting Over the
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Figure 1.2 shows the projected grow
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The consequence of this rapid urban
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LEARNING ACROSS BRICS: from city-re
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Addressing these challenges require
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TRANSFORMING OUR WORLD: THE 2030 AG
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Key issues for South African cities
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! ! ! ! ! ! ! ! ! ! ! ! Cities and
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Figure 1.8: Population change total
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Figure 1.10 shows that, while popul
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Significant densification through b
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Increased densities and demand have
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Global networks versus domestic res
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Informed by five years of research
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Key Messages 1 2 3 4 5 Spatial tran
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In cities, economic and social ineq
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Undesirable current spatial configu
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neighbouring municipalities are not
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Built environment investments not s
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The cost of fragmentation In additi
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associated land uses benefit all, n
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Local government is best placed to
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Competing land interests need to be
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PRE-1994 building POLICY 1994-2003
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The 2011 State of South African Cit
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The most recent National Household
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Figure 2.6: Alternate transport-urb
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SPATIAL TRANSFORMATION: Tracking tr
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Spatial transformation needs respon
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What is Required to Transform South
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Transformation of management and ca
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PRODUCTIVE CITIES Spatial transform
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Introduction South Africa is headin
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Congestion and pressure on resource
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transportation networks. Land-use p
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strategies in separate silos, with
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The Economic Role and Performance o
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• Johannesburg is South Africa’
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Nevertheless, recent economic fores
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• In the last five years, Tshwane
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Figure 3.7 shows the average labour
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Over the last 10 years, at a sector
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There is a marked correlation betwe
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Figure 3.13: Estimated city share o
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Figure 3.15: City gross fixed-capit
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development role set out in the 199
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Table 3.3: Key economic development
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• eThekwini has an active economi
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Both types of township are low-inco
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Informal economy and self-employmen
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South Africa’s Expanded Public Wo
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PRODUCTIVE CITIES 123 3
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Key Messages 1 2 3 4 5 6 Cities sti
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Andile’s story This is based on a
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of that ward participate in making
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Cape Town metro Mangaung Mamre Pell
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These service delivery gains have c
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YOUTH STUDY: Youth potential and vu
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However, when the NWAC is superimpo
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Tshwane, Figure 4.7: Johannesburg C
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As mentioned, urban integration is
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Table 4.2: Change in lowest income
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Ethekwini metro Northdale Hambanath
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Urban safety South Africa’s citie
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City’s unemployment rate is about
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Collective violence 7 Two main dime
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Towards More Inclusive Cities Citiz
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Furthermore, citizen education and
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South Africa requires a spatial pol
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SUSTAINABLE CITIES Leveraging the t
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Introduction Since 1994, the govern
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will need to have low-emissions gro
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Most of South Africa’s energy con
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Figure 5.3: Average baseline energy
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• Tshwane initiated its A Re Yeng
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WASTE: legislation, policies and pl
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500 0 400 200 0 2011 2013 2015 2017
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facility (i.e. waste is sorted manu
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Figure 5.10: Depiction of in- and o
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As Figure 5.12 shows, Cape Town and
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Accelerating the transition to sust
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disadvantaged groups, through facil
Page 187 and 188: Accelerating the transition to food
Page 189 and 190: Biodiversity South Africa is the th
Page 191 and 192: Open spaces Ecological and social o
Page 193 and 194: in the city and in their homes then
Page 195 and 196: Emissions reduction to mitigate cli
Page 197 and 198: Principles of a Sustainable City Ur
Page 199: Recommendations Develop and embed a
Page 202 and 203: Key Messages 1 2 3 4 5 Cities have
Page 204 and 205: informal political and social cultu
Page 206 and 207: Section 51 of the Municipal Systems
Page 208 and 209: While these dynamics are critical a
Page 210 and 211: Blurred intergovernmental responsib
Page 212 and 213: Access to information As many ward
Page 214 and 215: Figure 6.5: Turnout for national an
Page 216 and 217: COMMUNITY-BASED PLANNING: Strengthe
Page 218 and 219: The right people are not necessaril
Page 220 and 221: Local government will require new k
Page 222 and 223: All the cities have performance man
Page 224 and 225: Unethical behaviour is one of the r
Page 226 and 227: Figure 6.9: Municipal audit consist
Page 228 and 229: Service Delivery and Development As
Page 230 and 231: Still playing catch-up on basic ser
Page 232 and 233: knew anything about the city’s ID
Page 234 and 235: The established routines need to ch
Page 237: FINANCE and INNOVATION Sustainable
Page 241 and 242: In 2013/14, unauthorised, irregular
Page 243 and 244: Figure 7.2: Nelson Mandela Bay Muni
Page 245 and 246: The challenge is that the interface
Page 247 and 248: Phase 3: City autonomy and accounta
Page 249 and 250: National Treasury uses Uniform Fina
Page 251 and 252: As Figures 7.5 and 7.6 show, Johann
Page 253 and 254: In the case of property development
Page 255 and 256: distribution. Johannesburg’s capi
Page 257 and 258: • Despite this, the overwhelming
Page 259 and 260: Effectiveness of spending and servi
Page 261 and 262: cities have low capital expenditure
Page 263 and 264: An encouraging development is that
Page 265 and 266: 3. Political interventions • Some
Page 267 and 268: Smart city strategies Smart city st
Page 269 and 270: encourage non-compliance. If priced
Page 271 and 272: • Municipalities could rightfully
Page 273 and 274: Recommendations If spatial transfor
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Page 278 and 279: Key Messages 1 2 3 4 5 A Call to Ac
Page 280 and 281: 1. The Spatial Transformation chapt
Page 282 and 283: Statements of intent in the SOCR St
Page 284 and 285: WARWICK TRIANGLE: A fragile public-
Page 286 and 287: Arguably, the primary constraint pr
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Figure 8.1: The quadruple helix - t
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• Completing the National Framewo
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development agency) that took place
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MILE’s strategic objectives are:
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Public participation should be the
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The implementation of CBP through t
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According to Cloete (2015) a partne
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The chapters in this State of Citie
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Overall Recommendations Urban space
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Ensuring city transformation throug
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Roadmap to the city dashboards All
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Buffalo City @refinedrevolt
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CITY FINANCE economy Municipal reve
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Overview of flagship programme The
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Reflections While the development o
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People and Households Size of city
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Design Capital Introduction Cities
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Manenberg Contact centre Source: P.
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City of Ekurhuleni @moography
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100% 80% 60% 40% 20% 0% CITY FINANC
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Overview of flagship programme Situ
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the corporate structure and governa
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Go!Durban Introduction Integrated p
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Go!Durban will include new railways
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City of JOHANNESBURG @jayjay_gregor
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100% 80% 60% 40% 20% 0% CITY FINANC
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Overview of flagship programme The
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However, the success of the Corrido
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Naval Hill Introduction Heritage is
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In December 2012, the redevelopment
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Msunduzi @natesvw
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100% 80% 60% 40% 20% CITY FINANCE e
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important tourist sites, there have
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In addition, the PURP includes the
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Safety and Peace through Urban Upgr
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A number of other projects have tak
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City of Tshwane @drae_savvides
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100% 80% 60% 40% 20% 0% CITY FINANC
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Wi-Fi is a significant enabler that
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The coverage map below shows the pl
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Introduction A key part of the deve
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These indicators were evaluated on
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SCODA is a partnership between citi
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Indicator PRODUCTIVE CITIES Definit
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Indicator SUSTAINABLE CITIES Defini
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2016 State of Cities Report Spatial
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Acronyms ACSA Airports Company Sout
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FIGURES Figure 1.1 State of South A
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. . . Figure 6.7 Percentage of seni
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References for Chapter 1 AfDB (Afri
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FFC (Financial Fiscal Commission).
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Cameron B. 2009. Integrated Rapid P
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References for Chapter 4 Balbo M. a
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Venter C and Cross C. 2014. Access
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DPME (Department of Planning and Mo
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National Treasury. 2006. Local Gove
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Tel: + 27 11 407 6471 • Fax: + 27
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