How Amalgamations Are Planned and Implemented

Melissa NS Ziswa, Dullah Omar Institute, University of the Western Cape

Relevance of the Practice

The South African amalgamation process of 2016 was kick started by the ‘Back-to-Basics’ programme, which analysed municipalities across the country, and concluded that approximately one-third of all municipalities were not doing well and some were not sustainable financially. To address the challenges being experienced by municipalities around sustainability or viability, several options were considered. These included direct interventions, strengthening district municipalities, or disestablishing and amalgamating some of the local municipalities to become larger local governments. The amalgamation of municipalities in South Africa in 2016 played a significant role in enhancing the economic viability of local governments, without necessarily targeting urban or rural municipalities. Although the amalgamations did not target rural municipalities per se (as other urban municipalities had poor economies). Nevertheless, the reality is that rural areas ended up more likely to be amalgamated as they were not as financially sound as their urban counterparts. This practice is closely linked to report section 3 on local financial arrangements because the amalgamation of local municipalities affects the tax base. For example, where municipalities that previously had a lower tax base were amalgamated with municipalities that had a higher tax base.

Description of the Practice

The practice of amalgamation is implemented in the same way in both urban and rural municipalities; in other words, the same laws apply to both urban and rural areas. Section 155(3) (b) of the Constitution states that before the amalgamation of local municipalities can occur, national legislation must establish criteria and procedures for the determination of municipal boundaries by an independent authority. In compliance with this obligation, Parliament enacted the Local Government: Municipal Demarcation Board Act, 27 of 1998, in terms of which the Municipal Demarcation Board was established to function as the independent authority to demarcate municipal boundaries, as required by the Constitution. The Municipal Demarcation Board comprises of members appointed by the President from a selection panel consisting of the following:

  • the President of the Constitutional Court (or another member of the Constitutional Court designated by the President of that court), who must also be the convenor of the panel;
  • a judge designated by the Chief Justice;
  • one member of the Commission for Gender Equality, established by the Constitution, designated by that commission;
  • two persons with specific knowledge of boundary demarcation (one must be designated by the Minister in consultation with the Members of (provincial) Executive Council (MECs) responsible for Local Government and the other person by the South African Local Government Association (SALGA); and
  • the Chairperson of the Select Committee of the National Council of Provinces responsible for local government matters. 

In Matatiele Municipality and Others v President of the RSA and Others, the Constitutional Court emphasised the rationale for an independent body so as to guard against political interference in the process of creating new municipalities. The Court held that ‘if municipalities were to be established along party lines or if there was to be political interference in their establishment, this would undermine our multi-party system of democratic government. A deliberate decision was therefore made to confer the power to establish municipal areas upon an independent authority’.

According to Section 22(1) of the Demarcation Act, the Municipal Demarcation Board could perform its functions on its own initiative; on request of the Minister or a Member of the (provincial) Executive Council (MEC) responsible for local government; or on request by a municipality with the concurrence of any other municipality affected by the proposed determination or redetermination.

Therefore, based on the challenges being experienced by municipalities around sustainability or viability, the Minister responsible for Local Government requested the Municipal Demarcation Board in terms of Section 22(2) of the Demarcation Act to determine or re-determine the boundaries of various local municipalities. When the Municipal Demarcation Board is considering whether to determine or re-determine a municipal boundary, it must have an overall objective in mind to establish an area that would adhere to a particular set of requirements.

In order for the Municipal Demarcation Board to attain the overall objective and to comply with the required criteria outlined above, the Municipal Demarcation Board must also take specific factors (as provided in the Municipal Demarcation Act) into account when determining a municipal boundary. Among these factors are:

  • the interdependence of people, communities and economies;
  • the need for cohesive, integrated and un-fragmented areas;
  • the financial viability and administrative capacity of the municipality to perform municipal functions efficiently and effectively;
  • provincial and municipal boundaries;
  • areas of traditional rural communities; existing and expected land use, social, economic and transport planning; and
  • the need for coordinated municipal, provincial and national programmes and services (including the needs for the administration of justice and health care and the topographical, environmental and physical characteristics of the area).

Apart from the Municipal Demarcation Board, it should be noted that the demarcation process involves a number of other role-players. These are municipal managers (these are appointed by the council), MECs responsible for local government affairs, Minister of Cooperative Governance and Traditional Affairs, traditional authorities especially the Provincial House of Traditional Leaders, SALGA and any key stakeholders such as affected municipalities, thus ensuring that there is participatory democracy. It is important to note that the participatory democracy does not extend to a popular vote of the affected communities.  According to Section 152 (1) (e) of the Constitution, one of the objects of local government is to encourage the involvement of communities and community organisations in local government. People’s participation in local decision-making is discussed in more detail in report section 6. Constitutional Court judgments such as Doctors for Life International v Speaker of the National Assembly and Others affirm this position. The public consultative process requires members of communities to furnish written submissions either rejecting or supporting the proposals for redetermination and rationalisation of municipal boundaries and furthermore, attend the public hearings convened by the Municipal Demarcation Board. Before the board has a public meeting, it should first publish a notice in the newspaper circulating in the area concerned, stating the date, time and place of meeting and inviting the public. The purpose of this is to make the people aware of such a meeting and to give them the opportunity to attend it if they wish. The Municipal Demarcation Board must also consider all representations and views submitted and may then take a decision on the determination or, before it takes such a decision to hold a public meeting, conduct a formal investigation or to do both. What this essentially means is that the Municipal Demarcation Board is the decision maker in respect of the amalgamation of local governments.

Assessment of the Practice

Literature suggests that when local government structures are large (among other reasons due to amalgamation), access through public hearings, meetings, elections or direct contact is difficult as political representatives become far removed from the electorate which in turn weakens citizen participation. However, this is not the case in South Africa. South Africa put in place structures such as wards and subcouncils to curb against this result. The former has helped bring people closer to their government in both urban and rural areas by creating channels through which people can communicate with their local government. However, subcouncils have not achieved the same goal since only specific metropolitan cities can set up subcouncils. This in turn excludes some metropolitan cities and all rural municipalities from a structure that brings people closer to their local government.  Nevertheless, it is important to note that for the metropolitan municipalities that qualify to establish subcouncils, their local councils have the discretion to decide whether or not to exercise the right to establish metropolitan subcouncils. To date it is not clear why the metropolitan municipalities other than Cape Town have decided not to establish subcouncils. It could be because they are content with just having wards as a means of enhancing citizen participation.

The aim of amalgamations post-2000 has been primarily to make municipalities more financially viable. However, a study conducted by Ncube and Vacu in 2014 indicated that the amalgamation processes in South Africa resulted in unintended economic consequences and significant transaction costs, especially during the transition process. Costs which the amalgamated municipalities have to bear. It is assumed that merging administrations reduces costs. However, while the Municipal Demarcation Board decides on the merger, it has no control over whether the merged administrations will actually reduce costs after they have been merged. The Municipal Demarcation Board can merge two municipalities with the aim of reducing administration costs. In this instance, the two municipalities can merge their administration and trade unions to ensure that there are no retrenchments. Therefore, the total staffing numbers remain the same. Furthermore, the merged staff may demand salary parity such that the lower paid staff members must be upgraded to match their higher paid equivalent that came from the other municipality. What that means is that the whole exercise may end up costing more instead of being an exercise to improve the financial viability of local government. Further, rural municipalities end up being affected the most since a majority of unviable municipalities are in the rural areas.

References to Scientific and Non-Scientific Publications

Legal Documents:

Constitution of the Republic of South Africa, 1996

Local Government: Municipal Demarcation Act 27 of 1998

Local Government: Municipal Structures Act 117 of 1998

Intergovernmental Relations Framework Act 13 of 2005

Doctors for Life International v Speaker of the National Assembly and Others (12) BCLR 1399 (CC)

Matatiele Municipality and Others v President of the RSA and Others 2007 (1) BCLR 47 (CC)

Scientific and Non-Scientific Publications:

De Visser J, ‘City Regions in Pursuit of SDG 11 Institutionalising Multilevel Cooperation in Gauteng, South Africa’ in Helmut P Aust and Anél du Plessis (eds), The Globalisation of Urban Governance (Routledge 2019)

Do Vale HF and Cameron R, ‘The Mosaic of Local Governments in Post-Apartheid South Africa: Municipal Asymmetries and Spatial Inequality’ in Jeffrey M Sellers and others (eds), Inequality and Governance in the Metropolis (Palgrave McMillan 2017)

Ncube M and Monnakgotla J, ‘Amalgamation of South Africa’s Rural Municipalities: Is it a Good Idea?’ (2016) 19 Commonwealth Journal of Local Governance 75

Steytler N and De Visser J, Local Government Law of South Africa (LexisNexis 2009)

—— ‘Implications of Amalgamation of Municipalities of Municipalities and Post 2016 Local Government Coalition Led Municipalities’ (presented to the Municipal Managers’ Forum, George, August 2017) <> accessed 23 November 2019

Koma SB, ‘Rationalisation of Municipalities: A Panacea for Improved Municipal Governance in South Africa?’ (2016)  9 African Journal of Public Affairs 127 <> accessed 17 December 2019