The South African Constitution establishes municipalities for the whole of the territory of South Africa. Through this it has made 'democratic and accountable government to the community' provided by local government accessible to 'all who live' in South Africa. The experience of government is felt through local government, and municipalities in particular.
In respect of development planning, the integrated development planning process, a domain of municipal government, is positioned as the base plan upon which the whole of state planning is supposed to be anchored. In regional terms, the 52 municipal jurisdictions constitutive of the whole of the territory of South Africa, provide nodal points through which intergovernmental relations, integrated development planning, and non-state stakeholder engagement on development could be harnessed as an opportunity to make government work and stable.
Out of these nodes, government can; ensure the provision of services to communities in a sustainable manner; promote social and economic development; and, promote a safe and healthy environment. To anchor democratic practice and living these regional nodes are institutions of leadership through which government can 'encourage the involvement of communities and community organisations in the matters of (local) government. This is constitutional.
For the institution of municipal government to function properly, it requires funding and revenue it collects as taxes and user payments. As government happens on and in municipalities, the 'national' and 'provincial' happens at and in the local. To happen, intergovernmental grants as mechanisms to support local government are part of the municipal government's fiscus. It follows therefore that intergovernmental fiscal relations that are not based on, at least, the objects of local government, particularly the integrated development planning construct through which communities are drawn in, are at best a theoretical construct.
It is the revenue raising capacity of municipalities that this rendition focusses upon, to illustrate how we may be headed for a failed state, unless integrated policy thinking becomes a territory our policy makers visit. In my stint as a stakeholder management executive of EDI Holdings, under the Chief Executive Officership of the current National Director General of the Republic, Phindile Baleni, I was made to realise the centrality of electricity distribution in the revenue collection and making activities of local government.
At EDIH, our mandate was to establish 6 Regional Electricity Distribution Companies, who would, and through a mergers and acquisitions process, take over the distribution roles of ESKOM and Municipalities. They would in the process become shareholders. My first point of call and policy discussion was to visit those stakeholders who displayed indifference at the new policy direction, and National Treasury, under current Reserve Bank Governor, Lesetja Kganyago, was at the time 'tolerantly and cautiously supportive' of the EDI process.
To cut a long story short, in my interaction with the then Treasury DG, he asked a question that redefined my whole attitude towards the EDI idea succeeding. He asked "if you take away the municipal revenue generated through electricity provision, where do you think I (the state) will get money to fund our local government system". He went further to say, "touching electricity distribution by municipalities is in itself going to be a consequential fiscal reform exercise, and I don't think we are ready for that".
Fast track to a post-NASREC policy position on ESKOM, particularly its unbundling as well as the policy on 'opening up the electricity generation' opportunity for 'private sector' involvement. These positions will in essence reconfigure electricity provision. The definition of 'bulk supplier' would create new entrants into the industry. Consumers of electricity will be disaggregated in terms of those that can pay and those that fail to do so. The multiplier effects of this reconfiguration will impact on the size and reach of government as a provider of democratic and accountable government for local communities.
The decision therefore by government to allow estates and other 'privately owned' human settlement spaces to self-generate electricity without due regard on how to replace the revenue that will be lost to municipalities may be tantamount to a decision to resize local government. As a political economy, local government has electricity revenue as one of the highly contested resource for its survival, otherwise EDIH would not have folded as a program of restructuring.
As a state South Africa has 4 000 plus municipal wards, in 8 Metropolitan Municipalities, 44 Districts Municipalities, and 226 local municipalities. These all indicate costs of sustaining the individuals drawn in by the democratic system, before those that the institutions employ to service the various publics, and the actual costs of delivering services. Unless otherwise explained, the decision for the contraction of municipal government involvement in electricity distribution is a form of gentrification of the poor who would perpetually be reliant on the local state for electricity as a basic service. In fact the energy insecurity that comes with this decision, will amount to exclusion in other 'energy dependent' revolutions South Africans still need to access.
The jury is out on how this decision will be integrated to all other policy imperatives of a developmental democracy such as ours, notwithstanding its dualities. What still looms large as a question from the then Treasury DG "are we ready for the fiscal reform that comes with the pending loss of revenue by municipalities?'. A concomitant process might be underway in the water sector, if the logic of 'restructuring network industries' is anything to go by.
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🤷🏽♂️Be ngisho nje
🤷🏽♂️Ek sê maar net
The point of course that the author misses is that in many cases changing the model of electricity generation and revenue is happening whether municipalities act or not.
ReplyDeleteI may look like I missed it, but the basis of this rendition is to recognise it is happening
DeleteI may look like I missed it, but the basis of this rendition is to recognise it is happening
DeleteIt's a pity it is so short and doesn't seek to unpack the solutions and measures.
ReplyDeleteThe nature of blogs is never to be too elaborate, I will consider an article on this matter. In that way I might venture into proposed solutions.
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