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How Hyperlocal Strategies could Revitalise South Africa’s Broken Local Municipalities
If the past 31 years have demonstrated anything, it is that the existing model for local government is broken. But adversity breeds innovation; perhaps, then, the moment has come to change how our failing local municipalities operate.
In a recent poll by the Brenthurst Foundation, seven out of every 10 registered voters in South Africa believed their municipality to be heading in the wrong direction, with infrastructure and corruption the two most pressing issues. This is not surprising considering that only 18 out of 166 audited local municipalities in South Africa received a clean audit in the Auditor-General of South Africa’s 2022/23 report.
Local municipalities are important. Despite the attention given to the country’s metropolitan hubs such as the cities of Johannesburg and Cape Town, the majority of South Africans – 67% – live across the country’s 205 local municipalities: from Newcastle in KwaZulu-Natal to the Richtersveld in the Northern Cape. Perhaps more important is the fact that local municipalities are home to a little over half of the country’s labour force and contribute a quarter of its GDP.
There are certainly gems to be found across these municipalities. Africa’s largest tyre producer — Sumitomo Rubber South Africa — is based in KwaZulu-Natal’s Alfred Duma Local Municipality. And Heineken’s largest African brewery, boasting an annual capacity of 8.5 million hectolitres, is based in the Midvaal Local Municipality south of Johannesburg.
And yet many of these municipalities are plagued by a host of governance, financial, and service delivery challenges. Even where this is not the case, human capital shortcomings limit the ability of municipalities to champion growth and competitive investment agendas.
These challenges serve as millstones around the necks of South African municipalities, their economic potential, and ultimately, South Africa’s economic growth.
The imperative for change
Where will South Africa’s local municipalities find themselves, say, five years from now? Failure to implement any significant course correction at a local level would risk spurring a vicious downward spiral of economic stagnation, leading to a hollowing out of South Africa’s local municipalities.
Consider the following scenario: A poor-performing local municipality discourages significant brown and greenfield investment, that is to say, investment from existing businesses domiciled within the municipality, and from external sources. The pool of economic opportunities would as a result remain largely stagnant, creating a sticky labour market in which those with jobs would be reluctant to pursue new opportunities — in part because there are few available — but also because there is no real economic upside in doing so.
Without new jobs being created and with existing roles not being vacated, new and younger jobseekers would be excluded from the local job market, contributing to the country’s unemployment rate. These individuals have three options.
They either remain unemployed, waiting for an economic opportunity to present itself; they could attempt to create an economic opportunity for themselves — be it formal or informal — which would be difficult given the existing malaise within the local economy; or they could move to a different area in pursuit of employment.
Those individuals who opt for the third option would migrate to those municipalities with a strong pull factor, typically larger and more economically active metros. This influx would subsequently place strain on existing infrastructure which, depending on the locale, might already be struggling to meet the demands of the existing population. This poses a social threat.
This series of events would lead to the hollowing out of South Africa’s local municipalities. As human and financial capital departs for greener pastures, poor performing municipalities would remain destinations of weak economic activity and growth, characterised by elderly populations, a low-skilled labour force, and high levels of unemployment. As we have seen elsewhere in the world, this creates fertile ground for populism.
Failure to rescue South Africa’s local municipalities therefore has economic, social, and political ramifications for the country at large.
A hyperlocal approach
There have been no shortage of national policy interventions aimed at driving economic growth across the country, but perhaps the solution to achieve this lies at a local level, away from the bureaucracy associated with national-level policymaking and the complexities surrounding its implementation.
As its name would suggest, a hyperlocal approach is concerned with leveraging those characteristics and stakeholders that are unique to a local municipality which, if coordinated and empowered, can play a role in promoting economic growth.
The first among these is to leverage a local municipality’s civil society — active citizenry as it is commonly known. Citizens and businesses are shareholders in their municipalities; they have a vested interest in its wellbeing and performance and should therefore have a voice in how things are managed and operated. This cannot be limited to local government elections every five years, however.
Local municipalities can benefit greatly from the insights, expertise and resources offered by an active citizenry: informal trader representatives can advise municipal officials on where targeted interventions would catalyse economic opportunities for traders; an urban improvement precinct (UIP) could resurface a key stretch of road, thereby saving the municipality funds that can be channelled elsewhere; and business chambers could provide the municipality with insights on where improvements could be made to benefit the local business community while also supporting efforts to attract new investment.
The second element is empowering local municipalities to operate with greater autonomy. The focus should be to empower those local municipalities that have shown a willingness to operate independently from their district counterparts, and which, importantly, have the requisite resources and capabilities to do so. This could prove effective in terms of service delivery.
For example, a local municipality could operate its own water service authority rather than having to rely on the district municipality for providing bulk water services. By doing so it could expedite the delivery of water to residents and businesses and respond to issues (i.e. maintenance) in a timeous manner.
The third and final element is one of versatility in the face of economic change. Local municipalities need to exploit new economic opportunities that present themselves while continuing to support existing industries so long as they provide an economic upside for their municipality. A key example of this is the informal economy: it is estimated at R600-billion in size, but is largely untapped and unregulated across the country.
‘A necessary step’
In April, Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa gazetted the discussion document on the review of the 1998 White Paper on Local Government.
The language used in the press statement was not the kind one usually associates with the government: the department’s decision marked a “necessary step towards a reimagined and results-driven local government system”, adding that it aimed to “incite fresh thinking, honest reflection, and decisive action toward building a fit-for-purpose local government system”.
Fresh thinking is certainly needed. And while a hyperlocal approach is not to be mistaken for a silver bullet, it outlays a series of actions that would be fundamental in unlocking economic growth at the local level, and ultimately for the rest of the country.
This article originally appeared on the Daily Maverick
