Zuma and Gordhan focus on local government {writer: Stef Terblanche}

In February, President Jacob Zuma delivered his State of the Nation Address against a background of spreading service delivery-related unrest in a number of towns across the country. A few days later, Finance Minister Pravin Gordhan delivered his maiden Budget Speech.

In both instances, many observers were disappointed that not more had been said about local government.

Yet, upon closer inspection, it is clear that much indeed will be happening on the local government front this year, and that both Zuma and Gordhan did make quite significant announcements in this respect.

In the case of local government, the focus was very much on the turnaround strategy currently under way in municipalities across the country. Other areas of importance for local government will be the improvement of municipal effectiveness through targeting key areas for performance outcomes; job creation for the young unemployed, with many to be absorbed by municipalities; improving health services; and improving the provision of housing, water, sanitation, electricity, waste management and roads.

Minister Gordhan has increased total allocations to local government from R55 billion in 2009/10 to R78bn in 2012/13 – a whopping 41.8% increase.

Even so, he cautioned: “We are mindful of the fact that even though transfers to municipalities have increased strongly over the past five years, service delivery problems persist. We are working with the Minister of Co-operative Governance and Traditional Affairs [Sicelo Shiceka] to resolve these problems, to improve financial management and to ensure that higher spending allocations translate into real improvements in people’s lives.”

However, at the time of these speeches, it appeared that Zuma and Gordhan would have more than service delivery problems to deal with. In Mpumalanga, after weeks of turmoil in Balfour’s Siyathemba township where residents violently protested against a range of grievances including poor service delivery, Minister Shiceka visited the troubled town to gain better understanding of the problems.

A few days later, violence and traffic disruptions erupted along the Golden Highway near Orange Farm south of Johannesburg. Some 1 500 residents were protesting the slow pace of service delivery.

This protest came only hours after Gauteng Premier Nomvula Mokonyane delivered her State of the Province Address, declaring 2010 a year of improved service delivery. “It is the year for all of us to work together to speed up service delivery. Our people cannot wait any longer,” she said.

And, indeed, they did not.

Within a day, these protests spread to Sharpeville in the Vaal Triangle where residents were prevented by burning barricades from going to school or work.

Here, residents also were protesting poor service delivery and claimed that the mayor had pocketed R22 million which had been earmarked for the renovation of the local George Thabe Stadium.

These protests are nothing new, and have spread steadily across all provinces in the last few years.

A more positive note

On a more positive note, the provincial Department of Co-operative Governance in Mpumalanga was able to announce in February that four municipalities – Pixley Ka Seme, Mkhondo, Lekwa and Thaba Chweu – which had been put under administration following last year’s service delivery protests, are showing significant improvements.

It all hinges around the local government turnaround strategy adopted by Cabinet in December last year.

In his address to Parliament, President Zuma made it clear: “Local government must work.” Municipalities will have to improve the provision of housing, water, sanitation, electricity, waste management and roads, he said.

“We held a meeting with mayors and municipal managers last year. This provided valuable insight into the challenges in local government.

“We also visited various communities and municipalities, including Balfour in Mpumalanga and Thembisa in Gauteng.

“After the Balfour visit, we sent a nine-member ministerial team to visit the area to address the issues that had been raised by the community. A number of issues have already received attention. I have directed the Ministers to attend to the outstanding matters,” he added.

Zuma also had a word of caution for the protesters: “We reiterate that there are no grievances that can justify violence and the destruction of property. We have directed law enforcement agencies to take a tougher stance on lawlessness in Balfour and other areas.”

Presenting a turnaround strategy to Cabinet on 2 December, Minister Shiceka said it was underpinned by two important considerations, namely that a one-size-fits-all approach could not work; and secondly, that both internal factors over which municipalities have control, as well as external factors over which they have no control, are causing problems in local government.

A more segmented and differentiated approach would be followed in future to address the different social and economic conditions and different performance levels and support needs of each municipality.

The minister further noted that internal factors relate to issues such as the quality of decision-making by councillors, quality of appointments, transparency of tender and procurement systems, and levels of financial management and accountability.

The external factors, he said, related to inappropriate legislation and regulation; revenue base and income generation potential; demographic patterns and trends; macro- and micro-economic conditions; undue interference by political parties; and weaknesses in national policy, oversight and intergovernmental relations.

The five strategic objectives of the strategy are to ensure that municipalities meet basic needs of communities; build clean, responsive and accountable local government; improve functionality, performance and professionalism; improve national and provincial policy, support and oversight to local government; and strengthen partnerships between local government, communities and civil society.

A number of longer term interventions were set out, while some of the immediate priorities for implementation include addressing the immediate financial and administrative problems in municipalities; promulgating regulations to stem indiscriminate hiring and firing in municipalities; tightening and implementing a transparent municipal supply chain management system; ensuring that the programmes of national and provincial government and state-owned enterprises are reflected in municipal Integrated Development Plans (IDPs); and overcoming the ‘one size fits all’ approach by differentiating responsibilities and simplifying these development plans.

Performance outcome targets

A key aspect in achieving this will be the performance outcome targets based on delivery agreements between responsible ministers in key targeted areas and the president, as announced by Zuma himself.

He said that apart from government being committed to the five priorities of education, health, rural development and land reform, creating decent work, and fighting crime, the government will also work to improve the effectiveness of local government, infrastructure development and human settlements.

Zuma announced plans to upgrade well-located informal settlements and by 2014 provide proper service and land tenure to at least 500 000 households, most of which fall in municipal areas. The government also will set aside more than 6 000 hectares of “well-located public land for low-income and affordable housing,” he promised.

In fleshing out the plans in respect of improving local government and delivery outlined by President Zuma, Minister Gordhan said this year’s Budget – the first to be shaped by the government’s new framework of outcomes and associated targets as anticipated in last year’s Medium-Term Budget Policy Statement that set out the key spending priorities – would, among others, lead to investment in local government and human settlements.

Gordhan said the consolidated budget of the government for the next year is R907bn and R2.9 trillion over the next three years.

Increased spending over the Medium-term Expenditure Framework period will amount to R87bn, while about R25.6bn has been identified through savings.

In total, he said, he was able to add R112bn to the baselines of departmental budgets.

“Of these amounts, over half go to provinces and municipalities for education, health, municipal infrastructure and human settlements, reflecting our commitment to sustaining growth in spending on our key priorities.

“The local government equitable share receives a further R6.7bn to support municipalities to cushion poor households for the rising cost of electricity and water.

An additional R2.5bn goes to the Municipal Infrastructure Grant,” he added.

Including provisions in the Budget itself, Treasury has made allowance for a R2.5-billion recapitalisation of the Land Bank, and a guarantee of R15.2bn for the Development Bank of Southern Africa, enabling it to extend capital to poorer municipalities for infrastructure projects.

And the cash reimbursement scheme to encourage the employment of young workers with no experience announced by Zuma and Gordhan will be available to tax-compliant businesses, non-governmental organisations and municipalities. Gordhan said estimates showed that about 800 000 people would qualify.

So all in all, a busy year lies ahead for local government – hopefully one that will see an end to delivery protests and a significant improvement in the quality of, and delivery by, local government.