LITERATURE REVIEW ON LOCAL ECONOMIC DEVELOPMENT TRENDS IN SOUTH AFRICA
3.2 The Developmental State
3.2.3 Institutional Framework
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South Africa has, in addition, aligned its national development planning to the Millennium Development Goals (MDGs) (Table 3.2) discussed in the context of local economic development in Africa (section 2.5). According to Olivier et al., (2010), the first Medium Term Strategy Framework (MSTF) priority relates to MDG 1 (the eradication of extreme poverty and hunger), while the objectives linked to the fourth MSTF priority, strengthen the skills and human resource base, relate to MDGs 2, 4, 5 and 6 (universal education, reduction of child mortality, improvement of maternal health, fight HIV and AIDS, malaria and other diseases). These authors are of the opinion that, MDGs 7 and 8 (ensuring environmental sustainability and development of a global partnership for development) do not form part of the main South African MSTF priorities which focus on: reducing inequality; eradication of racism and sexism; improving access to basic services; and improving the safety of citizens. However, the MDGs Country Report (StatsSA, 2010), clearly integrates all South African MSTF priorities as illustrated in Table 3.2. Based on current trends, the country will not reach the MDGs for child mortality (Goal 4), maternal mortality (Goal 5), and HIV/AIDS, malaria and other diseases (Goal 6) by 2015 (Financial and Fiscal Commission, 2011). Thus it is evident from Table 3.2 that the fifth MSTF priority of improving the health profile of the South African society will not be achieved within the prescribed time frame.
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Province of KwaZulu-Natal, and the study undertakes an analysis of the Local Municipality of uMshwathi in Chapter 5.
Figure 3.1 South African Institutional Framework Source: Adapted from National Treasury, 2010.
The Intergovernmental Relations Framework Act, Act 13 of 2005, and Chapter 3 of the Constitution provide for cooperative government and coordination of several government activities, aimed at the achievement of development within and across specific spheres. It does not appear as if the different spheres of government, National, Provincial and Local, have been suitably well-designed (Olivier, et al., 2010). Moreover there is a two-tiered system of local government, where ―local municipalities, share municipal executive and legislative authority in their area with a district municipality within whose area it falls‖
(Stanton, 2009:211). According to McAlinden and Mandimutsira (2007) most government departments tend to function within their sectoral scope, resulting in duplication and mediocre coordination. At national level, the Department of Cooperative Governance and Traditional Affairs (formerly the Department of Provincial and Local Government) promotes local development through programmes to strengthen the capacity of local
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government to provide leadership and direction in the context of their LED Programme (e.g. Project Consolidate, websites, IDP nerve centre, tool booklets, workshops).
The Department of Trade and Industry (the dti) through its mandated agencies, the Small Enterprise Development Agency (seda) and the National Empowerment Fund (NEF) plays an important role in LED. Through the Industrial Development Corporation, the dti drives the creation of Local Economic Development Agencies (LEDAs) toward a more business oriented approach to local development. The Department of Agriculture nationally takes the lead in rural development. The Department of Public Works is responsible for hard infrastructure and the Department of Public Enterprises for the establishment and development of strategic economic development zones and their public entities. The Department of Environment and Tourism Affairs is a major project funder in local areas, on a project basis. Many provincial departments operate within the sectors with similar functions, while concurrent national and provincial legislative (and concomitant executive) functional domain, exists. The National Strategic Skills Programme initiated in 2006 bears direct relevance to LED; however, the Department of Labour, with the mandate for labour market management and development, does not appear to play a role in the field of local economic development, and herein is evident an inconsistency, as the growth of jobs and the reduction of unemployment is one of the primary objectives of LED.
In undertaking a perfunctory examination of laws and policies to place local economic development (LED) in perspective as just not being local, there needs to be a clear understanding of the local. This is further examined in Chapter 5.3. While section 152(c) of the Constitution records the objectives of local government, section 153 (a) and (b) of the Constitution states that:
―A municipality must (a) structure and manage its administration, budgeting and planning processes to give priority to the basic needs of the community, and to promote the social and economic development of the community; and (b) participate in national and provincial development programmes‖.
Reforms in local government were complex and prolonged with wide-spread legislative, political, geographic and institutional transformation (Stanton, 2009). The demarcation process in South Africa resulted in three separate administrative reorganisation processes.
Prior to 1994 local government in South Africa consisted of over 1 200 racially based local authorities. In phase two, 843 transitional municipalities were created in 1995, which
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included a number of transitional councils in former homeland areas. Historically, municipalities were focused around towns with limited precincts, while extensive primarily rural areas were devoid of municipal government (Theron, 2008).
During the third phase in 2000, the country was re-demarcated into 284 wall-to-wall municipalities, characterised by the integration of urban and rural areas covering the full territory, as required by the Constitution. The rationalisation from 843 to 284 municipalities meant that the newly demarcated areas were geographically more expansive and demographically more populated, resulting in further administrative and fiscal reorganisation, as municipal staff and separate administrations, with different financial capacity and resources, were amalgamated into new municipalities (Kole, 2004.) It is evident that in many areas the subject matter of LED was unfamiliar contributing to the differing rate of development and implementation of LED plans and strategies in different parts of South Africa. Extrapolating further, one could assume that the processes of promoting the social and economic development of the community, and participating in national and provincial development programmes occurred only after 2000.
In 2005 a demarcation process aimed at aligning district and local municipalities to a particular province resulted in six category A (metros), 231 category B (local) and 46 category C (district) municipalities. Following the 2011 local government elections, further amalgamation brought the total to 234 local municipalities. The difference of 28 municipalities in the 2011 geographical frame is as a result of the absorption of 25 District Management Areas (DMAs) into the existing provinces (Map 3.1). The City of Tshwane absorbed two municipalities, Nokeng Tsa Taemane and Kungwini, while the new municipality of Kagisano Molopo (North West) was established by the merging of Kagisano and Molopo (StatsSA, 2011).
The Province of KwaZulu-Natal covers an area of 92 100 km2, the third-smallest province in the country. The population of approximately 10,8 million makes it the second most populous province in South Africa (19,8% of the South African population). KwaZulu- Natal is the province with the most municipalities, composed of one metropolitan municipality (eThekwini Metropolitan Municipality) and ten district municipalities, subdivided into 50 local municipalities (The Local Government Handbook, 2013).
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Map 3.1 Municipal boundaries of the 234 Local Municipalities (shaded areas show