Jacob Zuma
Jacob Zuma

IN South Africa socio-economic issues, which are emerging as a result of urbanisation, are not unique to the country. Worldwide, countries are experiencing a cash crunch and resource scarcity.
As a result of tough economic conditions and burgeoning populations, cities are seen to be a critical driver of economic growth. In this context it is important to address how metros are funded, planned and how infrastructure is rolled out.
While supporting the policy directives of the IUDF, strong emphasis should be placed on prioritisation and infrastructure implementation. African cities, as was noted in recent research by UNISA on the inclusive growth potential of major African cities, are doing many things right.
Ghana, for example has High Inclusive Growth Potential. South African cities of Pretoria, Johannesburg, Durban, Cape Town and Port Elizabeth fell in the Medium to Low classification.
It must be considered that a number of different aspects determine the Inclusive Growth Potential of a city. GDP per capita growth and Household Consumption Expenditure are both key in past and future data. This implies that without economic growth there is no inclusive growth. Looking closer at the findings of this research, in the past South African cities lead in nine of the 12 variables whereas looking forward, there are now six positive and six negative outcomes.
South Africa has a progressive legislation framework that empowers the public sector, especially local government and implementing agencies. However the game changer for the country lies in effective implementation of existing policies, enhancing the system over developing new tools.
Once again, the UNISA research puts forward an African example of Accra (Ghana), from which we can learn. The city is truly open for business and though suffering from many issues experienced in African countries, leaves the democratic debate open and manages it.
Looking at prioritisation, cities are the most complex sphere of government as they manage multiple businesses. At a provincial level there are defined sectors and separate budgets however at city level funding is from the same pool of resources, making prioritisation all the more complex.
At city level there is a range of legislative frameworks and policy directives that are applied effectively at the same time. In addition to this, there are political directives from City Councils and Metropolitan Municipal Councils (MMCs) wanting to shape the budget and framework in a particular direction that need to be answered to. These are competing interests and the complexity thereof is often underestimated.
The challenge is both technical and managerial. There are people in management who lack the necessary insight and decision-making skills. People who are elected but who are not familiar with the technicalities of managing assets and unable to accurately assess the future implications of resource allocations.
We need to consider the prioritisation process as a new area of focus and recognise the current situation. By way of an example, counselors are expected to choose between investment categories and to understand the long-term implications of investment. However South Africa lacks proper asset registers and clear land and management frameworks that allow the achievement of the local agenda, while making sure that proper investment for future security and growth takes place.
Furthermore, there is pressure to invest in infrastructure that will ensure re-election and cooperation towards a long-term objective. However this may or may not have substantial meaning depending on the confidence of being re-elected, a factor which tends to be overlooked. This is an inevitable feature of accountable government.
4. The Urban Dividend
The urban dividend pays out to residents when density and scale economies give a better quality of life to people living, working and playing in cities. Looking at the Urban Dividend, consideration should be given to integration in real terms; to getting the poor integrated into a city through commitment, public investment and legislation, even if it entails utilising public funds to buy expensive suburban, well-located properties and developing social housing thereon.
For example, integration means housing poor people in a well-located suburb such as Houghton and following through with the legal framework and policy requirements, while ensuring public investments. It means spending the R100 million to purchase a very small piece of well-located land rather than buying a large piece of land on the city edge. This is where the difficulty often enters the equation. Complexity does not lie in policies but rather, the will and commitment to make the right decisions and follow through.
5. Sustainable Growth Demands Long-term Thinking
Rapid urbanisation is evident in South Africa and the rest of Africa. It is expected that about 40 years from now 80% of the world will be urbanised. Such an overhaul in societies’ living dynamics would require a major change in the way we think about and approach city planning and development. Decisions being made today need to ensure sustainable growth in the future.
However, we do not fully understand the concept and dynamics of urbanisation. Although we have a picture of what is taking place at a more formal level, urbanisation seeps through the cracks at an informal level, and we have not yet fully grasped the long-term implications of this.
Urbanisation is not simply about backing infrastructure development financially. Having clear structures and guidelines on the role of the public and private sectors is important. The definition of urbanisation also incorporates the ability of people to move around, find jobs and work in cities. It is about concentration and the enablement of human potential. In order to ensure sustainable growth, it is important to create cities that ensure good quality of life and longevity.
Inclusivity looks at the broad population and includes everyone. The ideal is that the benefits of inclusive growth should have a positive impact on the broad population. The main driver of inclusivity is economic growth and to realise this objective, we need to create entrepreneurship opportunities. This is a complex issue and not simply a case of including entrepreneurs in the established economy. The problem in South Africa is that it is difficult to break down the barriers to allow changes to take place in the periphery and grow inclusivity.
6. Local Government & Inter-dependencies
In research where the South African system of government was compared with 20 other locations in the world, it became evident that the country’s system has a unique dimension. It is one of the few systems where local government is recognised in the Constitution, given specific powers and has specific allocated resources.
However South Africa does not have adequate rules for cooperation, coordination and management of interdependencies. There may be significant principles for coordination and integration but these have not been implemented as yet, and do not follow a set of governance rules. Further to this, organisations work with scorecards, which were referred to in the Dialogue as being the “worst tool for managing interdependencies.”
Furthermore, South Africa has a dated inter-governmental fiscal framework and inter-governmental relations framework, and these are the only tools to help local government to hold people accountable. It must be emphasised though that local governments however need to do more to ensure effective allocation of funds and roll-out of infrastructure in their sphere of responsibility.
9. Sustainable Growth Demands Long-term Thinking
9.1. Anticipate future requirements
Not only is it important to have a long-term view, it is also critical to discern the determining factors. In addition to population, migration, resource security and optimisation, we must look at technology, both hard and soft technology. In terms of “soft” technology we refer to better coordination and financial planning, improved utilisation of infrastructure assets and critically, leadership. Together with change for the better, bold and decisive leadership is fundamental for success. Assessment and adoption of new “hard” technologies is required to bring about greater efficiency and cost saving. For example, there are a lot of new innovations relating to the energy grid, renewables and storage technologies, which will impact the future significantly.
9.2. Experimentation
In South Africa everyone wants a suburban lifestyle. However the country needs to find workable solutions for densification. Good quality densified homes that deliver economy of scale and solve resource challenges need to be considered. Innovative Integrated Urban Development solutions can be developed by creating environments, which allow for experimentation with government planning systems. With regard to the challenges associated with social housing, for example, new types of buildings could be experimented with. Importantly, new financing models that are scalable and supportive of a new social upliftment mechanism need to be developed.
9.3. Ensure Infrastructure Asset Productivity
South Africa must take a long-term view on development of urban infrastructure. We are not developing infrastructure for five or even 50 years, but rather for the next century. To ensure sustainability and efficiency, asset productivity must be seen as an important indicator, together with gross-fixed capital formation. The dynamic between gross-fixed capital and productivity of assets is key and should be reflected as an indicator in how we determine effective spending. A holistic approach is imperative. One that begins with the planning and conceptualisation of assets, ensuring that the most efficient choices are made while being productive in relation to other aspects of the economy.
9.4. Adapt and Change
The solution to successfully establishing thriving urban areas is not restricted to effective planning.
It lies in adaptation. We need to think in a new way. Historically a one-size-fit-all approach to development has been followed in South Africa, yet cities are vastly different. Each city is, in its own right, a point of global connectivity but in a unique way. Every city networks in different ways and has different supply chains, financial and capital movements, information technology and knowledge streams.
In order to harness the strengths of each of its cities to unlock national growth, it is required for South Africans to break away from rigid, old thinking. There is also the problem of over-confidence in current systems and confidence bias towards old methods, as well as inertia to change and avoidance in taking risks. Rigid leadership will not work where we have high levels of uncertainty and change is needed.
The paternalistic political structure of urban areas needs to be reconsidered. Municipalities must be accountable to the people of a city and urban management should be given this direct responsibility.
This constitutes a major shift in the way in which the system currently functions however it could solve many problems facing municipalities. Notably, at a metro level the challenge in this regard differs. It is imperative that we understand what the real issues are at different levels, and distinguish between metros and municipalities.
10. Local Government & Inter-dependencies The IUDF brings coherence and direction to the debate surrounding urbanisation. It is important that local government engages actively in this debate, particularly with parallel developmental initiatives such as the Spatial Land Use Management Act (SPLUMA), Infrastructure Development Act and Treasury’s City Support Programme working to link local requirements to national imperatives. For example SPLUMA aligns national, provincial and local spatial development frameworks to ensure that policy objectives filter through to all levels. One area requiring attention is the alignment of State Owned Enterprises’ objectives with those on local agendas.
Importantly, we need to look at local government and municipal financial controls and funding.
Better ways of managing finances and eradication of corruption are imperative, although this should not impact accessibility to funding. Municipalities should be given power and resources and allowed to deal directly with problems on the ground.