Abstract
Metropolitan municipalities are largely regarded as the catalysts of economic development. The main finding of the paper globally. Eight metropolitan municipalities were introduced in the then new democratic South African state, post 1994. The article only reviewed the primary and secondary literature impacting on metropolitan financing and development, drawn from the desktop literature review and documentary analysis in the larger study. This article focussed on the three largest metropolitan municipalities, namely eThekwini; Cape Town and Tshwane City Councils. Increasing urbanisation and infrastructural decay has placed considerable pressure on these municipalities to deliver on their service delivery mandate, in the broader context of redistribution/equity. The accumulated developmental backlogs pre and post 1994 in South Africa are interrogated and the required funding for additional growth/development in metropolitan municipalities are explored. Public-private partnerships and alternative service delivery models are also examined as an option for enhancing service delivery. The issue of unfunded mandates has to be given serious consideration as they are currently impacting negatively on the finances of local government. The notion of a “smart city” and public private partnerships in the broader context of local economic development and financial sustainability has to be prioritised in terms of the overall socio – economic impact on local communities. A main finding of the paper was a funding gap in local government South Africa and the development of a model to address such a funding gap.Keywords: Development, Financing, Income, Metropolitan, Municipalities, South Africa
Highlights
Increasing pressure is being exerted on municipal finances in South Africa due to the historical backlogs, deteriorating infrastructure and service delivery challenges
Despite the progress made with basic service delivery, there are currently immense backlogs in the major metropolitan municipalities that are further exacerbated by rapidly increasing urban migration
The funds generated by municipalities are Own-source revenues (OSR’s), as opposed to grants and transfers expected from the higher governmental spheres
Summary
Increasing pressure is being exerted on municipal finances in South Africa due to the historical backlogs, deteriorating infrastructure and service delivery challenges. There has to be massive investment in metropolitan municipalities to facilitate growth, presently just above 2 percent (SARB, 2014) to ensure that progress is made in addressing development bottlenecks. A strategic metropolitan funding model will seek to facilitate a smart development strategy by guaranteeing that economic development, asset maintenance and developmental backlogs are adequately addressed. Becoming a smart city is the national metropolitan vision It goes beyond becoming a digital city with the emphasis being placed on achieving “value for money” through efficiency and effectiveness. This article critiques metropolitan financing with particular emphasis on the sources of income, and the adequacy thereof; the additional challenge of unfunded mandates, and the development of “smart cities” and public private partnerships
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