Assessing financial viability of selected urban and rural municipalities in the Eastern Cape
- Authors: Maclean, Sindisile
- Date: 2013
- Subjects: Finance, Public -- South Africa -- Eastern Cape , Municipal government -- South Africa -- Eastern Cape , Sustainable development -- South Africa -- Eastern Cape , Human services -- South Africa -- Eastern Cape , Municipal services -- South Africa -- Eastern Cape , South Africa -- Economic policy , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Doctoral , PhD (in Public Administration)
- Identifier: vital:11661 , http://hdl.handle.net/10353/d1007093 , Finance, Public -- South Africa -- Eastern Cape , Municipal government -- South Africa -- Eastern Cape , Sustainable development -- South Africa -- Eastern Cape , Human services -- South Africa -- Eastern Cape , Municipal services -- South Africa -- Eastern Cape , South Africa -- Economic policy , South Africa -- Economic conditions
- Description: The purpose of the research is to assess the financial viability of selected urban and rural municipalities in the Eastern Cape. Municipalities that are not financially viable and sustainable will always struggle to deliver basic services to communities. Without sound financial management systems, municipalities will be forced to discontinue their operations. Municipalities, particularly small and rural ones, are not self-sufficient and often rely on grants and transfers to satisfy their immediate short-term goal of providing basic services to satisfy the needs of their communities. Therefore, finance is regarded as an overriding and decisive factor for determining the viability of municipalities. The study seeks to investigate the financial viability of selected urban and rural municipalities in the Eastern Cape. Its key research questions are: Are municipalities able to provide sufficient funds to provide a range of services at an acceptable service level? To what extent do municipalities rely on external funding? Do municipalities have revenue collection capacity and revenue policies? The study asserts that most municipalities lack the required financial resources. They depend mainly on transfers from Provincial Government and equitable share and conditional grants from National Government. Section 152 (1) of the Constitution of the Republic of South Africa, Act 8 of 1996, states, amongst other things, that Local Government should ensure the provision of services to communities in a sustainable manner. The constitution further states that a municipality must strive, within its financial and administrative capacity, to achieve its objectives. The Municipal Finance Management Act, Act 56 of 2003, creates a framework for municipalities to borrow money and determine the conditions for short- and long-term borrowing. The Act assigns clear roles and responsibilities to the various role players involved in local government financial management. According to the Act, an annual budget for a municipality may only be funded from realistically anticipated revenues to be collected. As revenue projections in the budget must be realistic, the Municipal Property Rates Act, Act 6 of 2004, facilitates the collection of revenue in municipalities and establishes a uniform property rating system across South Africa. Property tax is the biggest element of local government tax revenue and is central to municipal finance. The Municipal Systems Act, Act 32 of 2000, amongst its objectives, provides for the manner in which municipal powers and functions are exercised as well as establishes a simple framework for the core processes of planning, performance management and resource mobilisation. The Act also provides a framework for public administration and human resource development. Finally, it also empowers the poor and ensures that municipalities put in place service tariffs and credit control policies that take their needs into account. The research contends that, whilst there is legislation and structures to assist and direct municipalities, it has been established that municipalities do not properly collect rates and taxes due to them to augment their revenue. The study has shown nevertheless that metropolitan municipalities have the capacity to collect revenue for municipal services. This is confirmed by their collection rate which ranges between 94 % and 97 %. There is also the culture of non-payment by communities for services rendered by the municipalities. Rural municipalities are exempted from property tax, while other rural municipalities who have an urban component, have to collect. There is also the question of unemployment and poverty. Consequently, municipalities are not self-sufficient and rely on grants and equitable share to survive. As a result of this lack of self-sufficiency, it is difficult to implement service delivery and also difficult to attract skilled personnel. The study has investigated why some municipalities fail to collect revenue and depend on national grants. The study employed both qualitative and quantitative methods. The findings of the quantitative paradigm have been presented in the form of graphs and charts. The major findings include: All municipalities have limited borrowing capacity; have not exceeded their budgets in terms of their spending; small municipalities have households as their main contributor of revenue collected; metropolitan municipalities get the big slice of their revenue from business; small and rural municipalities rely on grants and transfers and are therefore not financially viable; metropolitan municipalities are, to a great extent, financially viable but lack skills and capacity to utilize their resources for effective service delivery; and all municipalities under-spend their budgets. The study, after elaborating on the findings, makes recommendations on how municipalities should become financially viable.
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- Date Issued: 2013
Evaluation of international aid in Nelson Mandela Bay and Buffalo City Metropolitan Municipalities in the Eastern Cape Province of South Africa
- Authors: Lwanga-Iga, Ivan
- Date: 2012
- Subjects: United Nations -- Economic assistance , Economic assistance -- South Africa -- Eastern Cape , International cooperation -- Municipal government -- South Africa -- Eastern Cape , Human services -- South Africa -- Eastern Cape , Eastern Cape -- South Africa -- Economic policy , Eastern Cape -- South Africa -- Economic conditions
- Language: English
- Type: Thesis , Doctoral , PhD (Social Science Dev)
- Identifier: vital:11437 , http://hdl.handle.net/10353/d1007219 , United Nations -- Economic assistance , Economic assistance -- South Africa -- Eastern Cape , International cooperation -- Municipal government -- South Africa -- Eastern Cape , Human services -- South Africa -- Eastern Cape , Eastern Cape -- South Africa -- Economic policy , Eastern Cape -- South Africa -- Economic conditions
- Description: International Aid or Official Development Assistance (ODA), especially its implementation and effectiveness, has long been and continues to be a vigorously contested matter amongst the stakeholders in the development arena. The objective of this study is to evaluate the effectiveness of ODA in two municipalities in the Eastern Cape – Buffalo City and Nelson Mandela Metropolitan Municipalities – during the period 2005–2010. This period coincided with the introduction of the Paris Declaration (PD), an intervention intended to improve the ODA or Aid landscape globally. This was also the period during which the so-called service delivery protests in almost all municipalities in South Africa escalated. A diversified methodology including both quantitative and qualitative approaches was used in this study while adhering to the evaluation framework of the Paris Declaration as recommended by the Organisation for Economic Cooperation and Development (OECD). This framework put special focus on the five principles of ownership, alignment, harmonisation, managing for results and mutual accountability. Of particular significance in this study is the special attention paid to the actual beneficiaries on the ground, namely the communities, which is contrary to most existing Paris Declaration evaluations. The research findings suggested that there had been no conscious efforts to implement the Paris Declaration in the two municipalities that were investigated. Furthermore, the prevailing weaknesses in governance, coupled with both administrative and operational paralysis in these two institutions, provided for less than fertile ground for this intervention to thrive.The findings also highlighted that ODA programmes were very poorly known by most stakeholders, especially the communities who were supposed to benefit directly from this assistance. These results also underscored the partisan nature of ODA and how it influenced the perceptions of the various key players. The success and future of ODA programmes in South Africa, particularly in municipalities, will largely rely on “Active Citizenry”. Although ODA’s contribution to South Africa seems negligible in monetary terms, its significance lies among others in the innovations, piloting, risk mitigation, catalytic initiatives and capacity development it introduces or generates and which need to be correctly exploited, implemented and maximised. ODA in South Africa should therefore focus at the local level, the municipalities, which represent the interface between the citizens and the state. To ensure that the ensuing innovations are optimally cascaded down in an organised and effective manner to where they are mostly needed, ODA should preferably operate at the strategic level in municipalities. This would in turn assist in counteracting the current high levels of poverty and inequality in the country. Study findings further suggest that South Africa should cease its current ambivalence regarding ODA and refrain from the so-called “Triangular” ODA in support of the rest of Africa. The demands in it’s own back yard are steadily mounting. This is clearly reflected by the continuous service delivery protests and instability in several municipalities in South Africa.
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- Date Issued: 2012