in South Africa

52 Chris Heymans

The Broad Constitutional Framework

Most constitutions make only passing reference to local government.South Africa is one ofthe exceptions,and both postapartheid constitutions have dedicated considerable attention to local government (see figure 2.1 for a schematic outline ofintergovernmental relations).This interesting decentralist trait in the unitary system was chosen very consciously during the 1993 constitutional negotiations as an alternative to the federal system proposed by several negotiating parties.

The 1997 constitution extends the 1993 decentralist stance further,both in its general intergovernmental principles and through an extended section on local government.In principle,the constitution requires thatmunicipalities be established for the “whole territory ofthe Republic,”sometimes referred to as a wall-to-wall system ofmunicipalities.

Three concepts in the 1997 constitution are particularly significant to the nature ofintergovernmental relations.The first is the notion ofthree

National department: national competency or shared with province Department of provincial and local government National treasury

Intergovernmental forum, president’s coordinating council on local government, committees for ministers and members of executive councils, budget forum, budget council, and technical committees

Provincial department Provincial department of local government Provincial treasury

Metro, district council, or local municipality Local treasury

Source: Author’s illustration based on the constitutions and local government legislation.

FIGURE 2.1 Schematic Portrayal ofIntergovernmental Relations in South Africa

Local Government Organization and Finance: South Africa 53

“spheres”rather than tiers ofgovernment outlined in section 40(1).The intent ofthis semantic nuance is to reflect that the national,provincial, and local governments are equal,separate,and autonomous.Second,the constitution stresses that the relationship between the spheres should becooperative rather than hierarchical.The principle ofcooperative governance obliges the three spheres ofgovernment to cooperate and negotiate political and budgeting issues between them.Third,section 156(4) entrenches the principle ofsubsidiarity,which implies that a function should ideally be performed by the lowest possible sphere of government.

The constitution assigns broad functions to the three spheres ofgovernment.5 National and provincial governments are concurrently responsible for such functions as school education,health,welfare,and housing,with the national government determining policy and the provincial governments responsible for implementing a few exclusive functions.Most local government functions involve such user fee services as electricity,water,and sanitation;the remaining involve the provision ofpublic goods such as municipal and household infrastructure,streets,streetlights,and refuse collection.

But the constitution also mandates that national or provincial legislatures and executives transfer policy and implementation powers to municipalities.Sections 9 and 10 ofthe Municipal Systems Act,respectively,provide for general and specific assignments:

General assignments offunctions require the passage oflegislation, apply throughout South Africa (ifmade by the national parliament or a national minister) or in a whole province (ifmade by a provincial legislature or a member ofa provincial executive),and are more permanent. Specific assignments (delegations) require agreement between the bodies concerned,focus on a specific municipality,and could be formalized by a provincial proclamation.Because they exist by agreement,ordinary contract law applies.

There have been debates about the extent to which transfers offunctions have been accompanied by concomitant transfers ofthe resources required. Local governments complain that municipalities are often expected to take full responsibility for a delegated function (including the financing ofit), but that they have not actually been assigned the powers to finance those

54 Chris Heymans

functions.Currently,delegations are not controlled by any legislation,which opens the door for transfer offunctions by stealth.

National and Provincial Regulation ofLocal Government Policy makers and law makers continue to grapple with the appropriate balance between the legislative powers ofmunicipal government in this cooperative intergovernmental framework,on the one hand,and the policy and support roles that national and provincial governments are supposed to play toward local government,on the other hand.The system hinges as much on distinctiveness between these spheres as it does on interdependence and interrelatedness.

Enabled by the constitution,national and provincial regulation oflocal government is governed mainly through the Municipal Systems Act and the Municipal Finance Management Act (MFMA).A new Intergovernmental Fiscal Relations Act is to be implemented in 2006.The Municipal Systems Act empowers the responsible national minister to establish essential national standards and minimum standards for any matter assigned to municipalities, whereas provinces have primary responsibility to monitor municipal performance.National or provincial governments remain the regulators ofa function that was previously theirs and that they have assigned to municipalities.The MFMA,in turn,provides for national andprovincial treasury oversight oflocal government financial management.National departments have executed their regulatory powers differently,ranging from having an independent regulator (for electricity) to keeping the regulatory role inside the department (for water).Many have expressed concern that provinces have not been able to monitor local government performance effectively because ofcapacity constraints in provincial departments.

The Municipal Systems Act,the MFMA,and the constitution enable national and provincial government to intervene when municipalities fail to perform “an executive obligation in terms oflegislation”(section 139 ofthe constitution).Section 139 was amended amid some controversy in 2004 with the adoption ofthe MFMA.The amendments broadened the scope for national and provincial intervention in the affairs ofmunicipalities that fail to meet objectives or fiscal mandates.The MFMA’s passage provoked heated debate about the constitutional implications ofthese powers ofintervention. Ultimately,the provincial executive has that responsibility first,and only ifthe provincial executive does not intervene effectively,is national intervention possible.In terms ofthe MFMA,the government is in the process ofestablishing a specialized agency to deal with financial emergencies in municipalities.