Local Government Organization and Finance: South Africa
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T A B L E 2 . 7 The Equitable Share: Purpose and Allocations, FY 2003/04 Window of funding
Funding purpose
Factors in allocation
S grant
Fund operational costs of basic services in poor households
I grant
Fund institutional and governance requirements
Number of poor households and the relative difference between the number of poor individuals and number of nonpoor individuals; the costs of an estimated basket of basic services per household Overhead operating costs of municipality in relation to population size; declines as average municipal income increases
Original equitable share (S grant + I grant)
65.9
7.1
73.0
R293a
Fund R293 staff transferred from provinces to municipalities
Nodal
Fund projects identified in the local ISRDP and URP planning exercises Fund operational costs of some key services (excluding electricity provision to poor households) Fund operational costs of electricity provision to poor households
Free services
Window as % total equitable share
Historical distribution of R293s; decision about the number of R293 staff allocated to the municipality (and conversely to the province) Nodal areas—number of poor people in nodes
6.0
Average of number of poor households and households with basic services backlogs
13.0
Average of number of poor households and households with basic electricity backlogs
4.7
3.3
Source: National Treasury 2001, 2003b; Whelan 2003a, 2003b. a. Named after the number of the regulation that classified towns under control of former Bantustan administrations. After apartheid, these towns were initially transferred to provincial administrations, but in the late 1990s, they were transferred to municipalities as a result of a national decision.
