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A Case Study of Mogale City Local Municipality

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View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Wits Institutional Repository on DSPACE THE RESTRUCTURING OF INTERGOVERNMENTAL TRANSFERS: A CASE STUDY OF MOGALE CITY LOCAL MUNICIPALITY ARTWELL NKOSINAMANDLA DLAMINI A research paper submitted to the School of Social Science, Faculty of Humanities, University of the Witwatersrand, in partial fulfilment of the requirements for the Masters degree in Development Studies. University of the Witwatersrand, Johannesburg 2011 DECLARATION I declare that this thesis is my own unaided work. It is submitted for the degree of Master of Arts (in Development Studies) at the University of the Witwatersrand, Johannesburg. It has not been submitted before for any other degree or examination in any other university. Student: Signature _________________________________ Date _____________________________________ i DEDICATION To my mother, Dorah Sibonisile Dlamini, for inspiring, motivating and supporting me throughout my academic journey. ii ACKNOWLEDGEMENTS I would like to take this opportunity to thank my supervisors, Dr Prishani Naidoo and Dr Michelle Williams. I particularly appreciate your patience, encouragement and guidance. I wish to express my gratitude to my wife Thandeka for her selfless support. I am also indebted to my daughter Thandolwenkosi, and other family members Nozipo and “Thando Thando” for being behind me through and through. To Leone, Kgosi Thage,Boitumelo Molefe and Kgomotso Mangole thank you very much for helping me set up the interviews. My acknowledgements also go to Dorothy Tshwaedi, “Mahlodi” Philemon, Patricia Maleke, Thomas Mthimkhulu, Sasha Peters of the Financial and Fiscal Commission for all their help. Last but not least, I would like to extend my gratefulness to everyone who made this study possible. iii TABLE OF CONTENTS DECLARATION ....................................................... i DEDICATION .......................................................... ii ACKNOWLEDGEMENTS .................................... iii ACRONYMS ........................................................... vi FIGURES ................................................................ vii CHAPTER ONE ....................................................... 1 INTRODUCTION .................................................... 1 Aims of the study ............................................................................................................ 3 Research question ........................................................................................................... 4 Main question .............................................................................................................. 4 Subsidiary questions ................................................................................................... 4 Rationale of the study ..................................................................................................... 5 Methodology ................................................................................................................... 7 Research design .......................................................................................................... 7 Qualitative research methods .................................................................................... 10 Sampling ................................................................................................................... 11 Ethical considerations ............................................................................................... 12 Limitations of the study ............................................................................................ 12 Chapter outline .............................................................................................................. 13 CHAPTER TWO .................................................... 15 LITERATURE REVIEW AND THEORETICAL FRAMEWORK ...................................................... 15 Introduction ................................................................................................................... 15 Contextualising intergovernmental transfers ............................................................ 15 Intergovernmental transfers in South Africa ............................................................. 20 Emerging trends characterising transfers in South Africa ........................................ 25 Theoretical framework .............................................................................................. 28 Conclusion ................................................................................................................ 33 CHAPTER THREE ............................................... 35 iv PROVISION OF FREE BASIC SERVICES IN MOGALE CITY ..................................................... 35 Introduction ................................................................................................................... 35 Mogale City as a Category B1 local municipality ........................................................ 36 Trends in the provision of free basic services in Mogale City ...................................... 37 Two faces of informal settlements ................................................................................ 41 Contextualising equitable share within transfers flowing to Mogale City .................... 42 Conclusion .................................................................................................................... 45 CHAPTER FOUR .................................................. 46 RESTRUCTURED TRANSFERS AND PROVISION OF FREE BASIC SERVICES ....... 46 Introduction ................................................................................................................... 46 Do transfers signal decommodification? ....................................................................... 47 Transfers making no dent on inequities and inequalities .............................................. 52 Resources are scarce: Flaws in funding model ............................................................. 61 Conclusion .................................................................................................................... 64 CHAPTER FIVE .................................................... 66 INTERGOVERNMENTAL TRANSFERS, INDIGENT POLICY AND NON-PAYMENT ..... 66 Introduction ................................................................................................................... 66 Indigent policy: Exclusion, stigmatisation and abuses ................................................. 67 Culture of non-payment: The “politicisation” of payment of services ......................... 74 Conclusion .................................................................................................................... 80 CHAPTER SIX ....................................................... 82 CONCLUSION ....................................................... 82 REFERENCES ....................................................... 88 APPENDIX ............................................................. 98 LIST OF INTERVIEWS ....................................... 98 v ACRONYMS ANC African National Congress APF Anti-Privatisation Forum BS Basic services CBD Central Business District CDW Community Development Worker CLO Community Liaison Officer CoGTA Department of Cooperative Governance and Traditional Affairs DA Democratic Alliance DORA Division of Revenue Act DPLG Department of Provincial and Local Government FBW Free Basic Water FFC Financial and Fiscal Commission FF+ Freedom Front+ GEAR Growth, Employment and Redistribution Strategy IDP Integrated Development Plan IMF International Monetary Fund Kl Kilolitre Kw Kilowatt kWh Kilowatt hour MFMA Municipal Finance Management Act MIG Municipal Infrastructure Grant MIIF Municipal Investment Infrastructure Framework MKVA Umkhonto we Sizwe Veterans Association MMC Member of Mayoral Committee NGOs Nongovernmental organisations NEM Normative Economic Model RSC Regional Service Council WSA Water Services Authorities WRDM West Rand District Municipality vi FIGURES Figure 1: Illustration of the fiscal framework showing transfers to local government and own income Figure 2: Domestic water tariffs 2009/10 Figure 3: New access to sanitation services within minimum standards (n) Figure 4: 2009/10 Budgeted Financial Performance: analysed by vote vii CHAPTER ONE INTRODUCTION In this global market economy, everything is now up for sale, even areas of life once considered sacred, such as health and education, culture and heritage, genetic codes and seeds, and natural resources, including air and water. – Barlow and Clarke (2002) Municipal IQ (2010) notes that from January 2009 to December 2009, a record high of 105 service delivery protests were reported throughout South Africa. This figure dwarfs the total of 27 reached in 2008 and 31 counted in 2007. In 2010, 107 protests occurred (ibid). These protests suggest that people are discontent about, or lack access to, basic services such as water and electricity. This raises a pertinent question about whether intergovernmental transfers, such as the local government equitable share, are succeeding in facilitating the provision of adequate free basic services to the poor. In most developing countries, intergovernmental transfers account for the dominant share of revenue available for lower levels of government to utilise in furnishing their expenditure needs (Shah 1994 and Bahl
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