The Amalgamation of Municipalities in 2016

Tinashe Carlton Chigwata, Dullah Omar Institute, University of the Western Cape

Relevance of the Practice

Rural municipalities throughout the world often face a different set of challenges than their urban counterparts. In South Africa, the government has adopted and implemented many interventions to improve the state of local government. In 2016, some of the municipalities were disestablished and/or amalgamated to address challenges related to financial viability and functionality. The 2016 amalgamation process is an interesting practice that is relevant for the LoGov-project in many ways. It has implications on all the report sections from structures, finance, responsibilities, intergovernmental relations and citizen participation. It is therefore likely to be useful for comparative purposes relating to the urban-rural interplay in the participating member countries in the LoGov-project.

Description of the Practice

The number of municipalities in South Africa has gradually decreased since the ushering in of the democratic era in 1994. There were 1262 racially segregated municipalities in 1994, which were reduced to 843 transitional municipalities by 1996. The 843 transitional municipalities were consolidated to 284 municipalities ahead of the 2000 local government elections. After the elections, the 284 wall-to-wall municipalities became the first democratic local government units in the history of South Africa. Of the 284, 16 were cross border municipalities designed to integrate linked communities and economies on different sides of a provincial boundary. The 1994 to 2000 establishment, disestablishment and amalgamation processes were primarily aimed at democratising municipalities by, among other ways, bringing to an end racial division as the basis for the establishment and functioning of municipalities.[1]

The 284 municipalities were reduced to 283 ahead of the 2006 local government elections primarily to do away with the notion of cross border municipalities.[2] Provincial boundaries had to be amended to realise this objective. The 283 municipalities were further reduced to 278 ahead of the 2011 local government elections. A municipal boundary review process ahead of the 2016 local government elections culminated in the disestablishment and/or amalgamation of 21 municipalities resulting in the number of municipalities going down to the current 257. The process of disestablishing and/or amalgamating municipalities in 2016 was initiated by the national Minister responsible for Cooperative Governance and Traditional Affairs in 2015.

A government review of the state of local government in 2014 had revealed that only 37 per cent of the municipalities were functional and viable.[3] The other 32 per cent were almost dysfunctional and required support to get the basics right whereas the remaining 31 per cent were dysfunctional and required significant work before they could get the basics right.[4] Some of the worst performing municipalities faced viability and functionality problems. The Minister, relying on his powers under Section 22(2) of the Municipal Demarcation Act, requested the Municipal Demarcation Board (MDB) to re-determine the boundaries of about 93 municipalities to address these and other problems.[5] This request attracted ‘much criticism, protest and litigation, with opposition parties arguing that it was gerrymandering (ANC using demarcation to influence the outcome of the 2016 local government elections) and that the board was dancing to the Minister’s tune’.[6] This is against the background that the proposed re-demarcation exercise was to take place outside the ordinary boundary redetermination cycle of the MDB.

After considering views from the public and other stakeholders, the MDB proceeded with 21 out of 34 requests/proposals from the Minister.[7] The main reasons for pursuing the 21 requests was to define boundaries so as to improve financial viability.[8] As has been the case over the years, the process of re-demarcating municipal boundaries involved a number of actors as required by the Constitution and the Municipal Demarcation Act 27 of 1998. The key actors included: the MDB, the relevant municipal councils, Member of the Executive Council responsible for local government in the relevant province, Minister responsible for COGTA, affected communities, organised local government, and traditional authorities, where applicable. While several actors were involved, it is the MDB that had/has the final authority pertaining to matters to do with the demarcation process. The process culminated in the disestablishment and/or amalgamation of the 27 municipalities in 2016.

Assessment of the Practice

One of the pertinent challenges that have confronted the South African local government system in the past two decades is that a significant number of municipalities are not financially viable and not functional. Despite being empowered by various resource-raising powers, they are not in a position to raise revenue sufficient enough to meet the majority of their needs and obligations. As a result, service delivery in these municipalities, which are generally in rural areas, semi-rural areas and in poor towns, is mostly substandard or non-existent. Some of these municipalities are located in the former homelands, which were reserved for the black population under the apartheid era.

The (re)demarcation of municipal boundaries ahead of the 2016 local government elections was aimed at improving the financial viability of municipalities and ultimately, functionality. Yet, more than five years later most of the newly created or amalgamated municipalities remain financially unsound and dysfunctional. This can be attributed to the fact that these municipalities inherited poor tax bases. The amalgamation process brought together a large number of poor households, most of whom are unable to pay for the services provided, under the same municipal jurisdiction. The implication is that most of these municipalities have to provide services to a wider geographical area but to people who cannot pay for those services. The amalgamation process could also have impacted negatively on democratic participation in some municipalities given the expanded boundaries and largely dispersed communities, which may make democratic participation and accountability difficult to attain. The South African experience may suggest that the amalgamation of municipalities is not necessarily a panacea for addressing municipal viability and functionality concerns.

References to Scientific and Non-Scientific Publications

Legal Documents:

National Treasury, ‘Municipal Budget Circular for the 2019/20 MTREF’ (MFMA Circular no 94, Municipal Finance Management Act No 56 of 2003, May 2019)

Scientific and Non-Scientific Publications:

Department of Cooperative Governance and Traditional Affairs (COGTA), ‘Local Government Back to Basics: Serving Our Communities Better’ (COGTA 2014)

Municipal Demarcation Board (MDB), ‘Twenty Years Later: The Municipal Demarcation Board Reflects on its Contributions, Experience and Lessons Learnt’ (Pretoria 2019)

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

[10] According to section 79 of the Municipal Structures Act, ‘a municipal council may establish one or more committees necessary for the effective and efficient performance of its functions or the exercise of any of its powers’.

[11] —— ‘Findings from the 2019 Metro Open Budget Survey’, above, 11.

[12] —— ‘Findings from the 2019 Metro Open Budget Survey’, above, 15.