The state and local government

⁷⁶⁸ Though, as Dexter Whitfield notes, the rate of new PPP projects agreements in such countries declined 15 per cent in value between July 2008 and March 2009; and the Public Private Infrastructure Advisory Facility review concluded that projects in 2009 ‘are expected to decline substantially compared to the peak levels of 2007 and 2008, and to remain subdued for years as global deleveraging continues’.⁷⁶⁹ Meanwhile, in post-apartheid South Africa government departments, provincial and local government had signed 18 PPP contracts by January 2009 – with a further 55 projects at different stages of development and procurement – under the 1999 Public Finance Management Act.⁷⁷⁰
‘Why did South African local democracy jump from the apartheid frying-pan into the corporate-monopoly-capitalist fire?’⁷⁷¹

Liberal democratic accounts

The ANC came into power in 1994 ‘promising an ambitious program to expand access to public services, regardless of ability to pay, in order to redress the inequities the apartheid system created’, and ‘delegated to local governments significant responsibility to implement this policy by placing them in change of providing access to vital services, such as electricity, primary health care, sanitation, and water’.⁷⁷² However, as Barak Hoffman – an orthodox liberal democratic political scientist – also pointed out in 2007:
in a stunning reversal…the current policy of the ANC government rather than encouraging local governments to provide affordable services for all seems to embrace almost the opposite: local governments should treat access to services like private commodities by charging citizens market rates….the central government allows local governments to privatise any services and private firms can make a profit from providing a number of them, such as electricity, fire fighting, gas, municipal transport, refuse removal, sanitation, and water.⁷⁷³
Why did this ‘stunning reversal’ occur? Jaap de Visser, at the University of the Western Cape in South Africa, is another orthodox liberal democratic political scientist who does not even mention privatisation. Nevertheless, De Visser still provides a useful descriptive and analytical account of South African local government pre-1994, its transformation, record of delivery, current challenges and what he calls its ‘institutional fault lines’. He shows how, before 1994, no single, uniform system of local government existed across the country
Each province had its own configuration of local government institutions. Local government as an institution of governance was subservient, racist and illegitimate. The subservience of local government was manifest in that local authorities existed in terms of provincial laws, and in that their powers and functions were dependent on and curtailed by those laws. The development of separate local authorities for separated racial groups, under the leading theme of ‘own management for own areas’, produced a clever scheme of naked exploitation on the basis of race. Without exception, the well-resourced and viable commercial centres with their strong revenue bases were reserved as white areas. The outlying and poor areas without meaningful formal economies were reserved for black people.⁷⁷⁴

Negotiations on local government between the apartheid government and the liberation movements commenced in earnest in the beginning of the 1990s. They produced a foundation for local government transformation. Essential to the outcome was the adoption of the principle of ‘one city one tax base’, the slogan with which the grossly inequitable distribution of resources was opposed by the liberation movement. The Interim Constitution (Constitution of the Republic of South Africa 1993) paved the way for the first democratic elections in 1994 and for the formulation of a final Constitution by the newly elected Parliament. It ushered in constitutional recognition for local government by recognising its autonomy and guaranteeing it revenue generating powers, as well as a right to a share of nationally generated revenue. The Interim Constitution set the scene for the amalgamation of over a thousand racially defined and disparate local government structures into 842 transitional local authorities. The final Constitution of 1996 then contained a definitive statement on local government, in the form of a progressive chapter in which local government is firmly established as a mature sphere of government. Furthermore, the Constitution posited local government as a critical development agent by listing the ‘constitutional objects’ and ‘developmental duties’ of local government. These centre around democracy, sustainable service delivery, social and economic development, environmental protection, community participation, poverty alleviation and intergovernmental cooperation. The 1998 White Paper on Local Government preceded the implementation of the constitutional provisions. The Local Government: Municipal Structures Act of 1998 provided a legal framework for the establishment of local government institutions. It established two modes of local government: single-tiered metropolitan municipalities in large urban areas, and a two-tiered system of district and local municipalities throughout the rest of the country. It further provided a framework for the internal functioning of municipalities.

Critical new aspects were the introduction of firstly, an ‘executive mayor’ system of municipal governance (these are elected by the council, which is now possible in Britain [see chapters 6 and 7]) alongside the classic ‘collective executive committee’ system; secondly, a separately elected municipal speaker; and thirdly, ward committees as vehicles for community participation. On 5 December 2000, municipal councils were elected into this new system of local government.⁷⁷⁵ The number of councillors was also reduced from approximately 12,000 to less than 9,000; and full-time paid councillors were introduced.⁷⁷⁶ The latter include Executive Mayors, Deputy Executive Mayors, Councillors responsible for Financial Matters, Mayors, Members of Mayoral and Executive Committees, Speakers, Chairpersons of Sub-Councils and Deputy Mayors.⁷⁷⁷

Basic service delivery has been extended to the marginalised to a degree that is unprecedented in South Africa’s history, and at a pace that is noted and commended internationally. Access to water supply increased from 59 per cent of total households in 1994 to 86 per cent by April 2007. Access to sanitation increased from 48 per cent to 73 per cent over the same period. In 1994, 30 per cent of houses in South Africa had access to electricity, but by 2006/07 this figure had increased to 73 per cent. From 1994 to 2006 a total of 2,243 million houses were delivered at an average of 249,290 units per annum.⁷⁷⁸ However, social protests emerged most intensively during 2005 and 2006 and continued in 2007 over poor records of service delivery, and real and perceived instances of corruption.⁷⁷⁹ It is also relevant to note that whilst municipal political leadership in South Africa is democratically elected under a national electoral system, voter turnout over the last three local government elections has averaged around 48 per cent.⁷⁸⁰ Negative sentiments that contribute to a lower turnout for local than for national and provincial elections relate mainly to a lack of interest and trust in local government.⁷⁸¹ Though average turnout in South African local government elections is still much higher than in Britain – where it is only 35 per cent.⁷⁸²

A significant challenge is the size of the average South Africa municipality. The country, according to the Independent Electoral Commission, has 283 municipalities – six metropolitan municipalities, 231 local municipalities and 46 district councils⁷⁸³ – that serve a population estimated at 49.32 million in the middle of 2009⁷⁸⁴ and cover a landmass of 1,220,813 square kilometres.⁷⁸⁵ At the 2006 municipal elections 8,350 councillors were elected: 3,895 by wards and 4,455 by proportional representation.⁷⁸⁶ Moreover, since 1994, as Collette Schulz-Herzenberg shows, South Africa’s eligible voting age population (VAP) - which consists of citizens over 18 who are eligible to vote - has increased by approximately seven million people over 15 years due to population growth: from 22,709,152 in 1994; to 22,589,369 in 1999; to 27,865,537 in 2004; and to 29,956,957 in 2009.⁷⁸⁷ Hence the average number of persons per councillor in South Africa is 5,907 – compared to 2,900 in Britain, which is far higher than in any other European country except Ireland with 5,375 (see Chapter 6, Table 6.3) – and 3,588 for those eligible to vote.⁷⁸⁸ Moreover, in Britain – where the average number of persons per councillor increased from 2,130 in 1975 to 2,900 in 2009 (see Table 6.3) – New Labour further drastically reduced both the number of councillors and councils (see Chapter 6).

The executive mayor system in South Africa has created a wide gap between executive councillors (that is, councillors on the mayoral committee) and ‘ordinary’ (referred to as ‘backbenchers’ in Britain) councillors who are not part of the mayoral committee. These councillors feel increasingly disadvantaged due to the lack of access to documentation and information flows, as in Britain where they no longer make policy except in a few very small local authorities (see Chapter 6). A report on the functioning of the mayoral executive system by the Institute for a Democratic South Africa⁷⁸⁹ cited by De Visser remarked that:
[i]t is clear that the relationships between the mayoral executive committee and non-executive councillors are not based on democratic values, but display a lack of transparency; autocratic decision-making; and accountability. This is expressed by stakeholders as a lack of respect for one another, a culture of secrecy, and perceptions of marginalisation.⁷⁹⁰
Executive mayors also ‘decide who is entitled to training, conference visits and other types of councillor support.’⁷⁹¹

The South African and British mayoral systems, moreover, are modelled on the USA where corruption has always been a serious problem – see Chapter 7 – as is now the case in South Africa. For example:

A group of senior councillors and officials of the Mangaung municipality in the Free State who ran an ‘organised corruption syndicate’ allegedly looting the municipality of more than ten percent of its R1.5 billion budget. The mayor, Papi Mokoena, was fired by the ANC in October 2005 and in April 2006 the chief operating officer Mzwandile Silwana and the city manager Majalefa Matlole were also dismissed. In July 2005 the Scorpions arrested the then-mayor, his wife, his political advisor, the city manager, the chief operating officer and then-speaker of the municipality. They appeared in court on 13 April 2006 where the defence teams opposed a State application for a further postponement. The newly elected Mangaung mayor, Gertrude Mothupi, who is the sister of provincial ANC Secretary Lobe, attempted to stifle the council investigation into corruption. This was allegedly an attempt to conceal Lobe’s role in the network of corruption. In a separate development a forensic investigation revealed a scam involving an unauthorised transaction that would cost the Mangaung municipality R79 million for a property independently valued at between R14 million and R25 million. The land was sold by the municipality for a pittance after striking a deal to buy it back in developed form. There was no tender. The deal, which was approved by Chief Operating officer Mzwandile Silwana and city manager Mojalefa Matlole, and involving apparent friends, came to light in a forensic study commissioned by the municipality.⁷⁹²



There is also a contradiction between the progressive legal framework for community participation and persistent incidences of protest targeting councillors and municipal administrations. Although government has created ample spaces, platforms and procedures for community engagement with local government, it is clear that communities still elect to take their grievances to the streets. These protests expose not only the current shortcomings in service delivery but also the presence of untapped local energy and involvement with municipal governance. Doreen Atkinson suggests that the frustrations of communities are threefold. They relate to poor service delivery, unresponsive decision-making and conspicuous consumption by councillors and officials.⁷⁹³

The legal and policy framework for development planning in South Africa envisages that municipalities will play an absolutely essential role in realising coherent planning across the three spheres of government. Each municipality is required by law to adopt an integrated development plan (IDP). The IDP must be adopted shortly after the beginning of a municipal council’s term. Furthermore, it must be reviewed annually. It is the municipality’s strategic plan that is based on an intensive community participation process to gauge and prioritise the municipal community’s needs. The IDP is expected to integrate the planning of all municipal departments under the umbrella of a united strategy for the municipal area. Importantly, the IDP must go beyond planning rhetoric and be the basis for the municipality’s annual budgets and its spatial planning. Furthermore, the municipality’s senior managers must be held accountable regularly, through a system of performance management, for the realisation of the IDP. As if this configuration is not sufficiently ambitious, the IDP is expected to integrate not only the municipality’s plans but also the plans of all national and provincial departments and parastatals (such as electricity-generating and telecommunication utilities) in that municipal area. Yet capacity for integrated development planning at municipal level is low. The dependency on consultants to realise an IDP is staggering. A recent report suggests that 28 per cent of local municipalities lack the most basic capacity to prepare an IDP and will struggle even with additional support. Only one in three (37 per cent) municipalities has independent capacity to prepare an IDP, whilst another 35 per cent have some basic capacity and can prepare an IDP with additional support.⁷⁹⁴

Barack Hoffman does not attempt to explain why a ‘stunning reversal’ in ANC policy occurred – from ‘encouraging local governments to provide affordable services for all’ to treating ‘access to services like private commodities by charging citizens market rates’ and allowing them to ‘privatise any services’ occurred.⁷⁹⁵ And privatisation is not even mentioned in any of the other sources referred to above. This may be because, as Naomi Klein argued in The Shock Doctrine: the Rise of Disaster Capitalism, in South Africa’s route to neoliberalism there was an element of stealth, with white business interests taking advantage of the ANC’s overwhelming focus on the politics of achieving black majority rule to preserve their property rights and install a conservative macroeconomic regime. But not everything was that subtle: big capital made clear their intention to leave should socialist policies be introduced, conveying the prospect of economic destabilisation. In these circumstances, the white elite found a valuable ally in chief ANC negotiator and future South African President Thabo Mbeki, who convinced Nelson Mandela that what was needed to stabilise the new regime, as Klein notes, was ‘something bold, something shocking that would communicate, in the broad, dramatic strokes the market understood, that the ANC was ready to embrace the neoliberal Washington Consensus’.⁷⁹⁶  

Conversely, according to Ronald Suresh Roberts⁷⁹⁷, Naomi Klein was
content to recycle the impressions of a small and like-minded clique of analysts such as fellow Canadian activist Patrick Bond….best known as an anti-government fundraising maestro within global ‘social movements’ circles.⁷⁹⁸
Roberts also argued that Klein ‘uncritically recycles the Mbeki-bashing views of William Mervyn Gumede’ – a ‘self-described Oppenheimer Scholar at St Anthony’s College, Oxford, and a former employee of the London Economist’s Intelligence Unit’ – and that the ‘Oppenheimer dynasty, founders of Anglo-American and owners of diamond-dealing De Beers, is to South African politics and economics as was Ford to American economic and politics, except more so: their plutocratic dominance of the South African economy far exceeds Ford’s influence within corporate and academic America’.⁷⁹⁹ Moreover, Roberts also rejected Klein’s suggestion that the World Bank succeeded in making private-sector partnerships the service norm: because, as ‘strategy and policy adviser to the ANC minister who piloted the 1998 water law reforms’, he claims he ‘personally insisted upon precisely the opposite bias, which is why section 19 of the 1997 Water Services Act establishes an explicit onus against public–private partnerships, of which there have been next to none’.⁸⁰⁰ However, as shown above, by January 2009 South Africa had 73 public-private partnerships. Contrary to Klein – who argued that they implemented a massive privatisation plan – Roberts concluded that the ANC
successfully resisted massive international pressure on privatisation, and Mbeki took the steps that were required to allow such resistance to prevail. The ANC has privatised nothing strategic other than the telephone company.⁸⁰¹
Luxemburgist explanations

Patrick Bond – who also worked for the water minister, as a budget advisor, at exactly the same time as Roberts – in his response to Roberts defending Klein’s analysis of South Africa states that:

Even though too many municipalities were badly run and impoverished, hence distasteful to Paris and London water companies, a $1 billion apparatus (the Municipal Infrastructure Investment Unit) was established at the Development Bank of Southern Africa, with World Bank and US AID support, to make PPPs the norm (and the unit was readily embraced by the water ministry)….The spirit of commodification was most explicitly introduced by that same water minister in his 1994 White Paper, which explicitly rejected subsidies to cover operating/maintenance costs even for poor rural recipients of new water systems – leading to most of those new systems' bankruptcy. The following year, the World Bank's main water staffer in the region insisted that the same minister not introduce the free lifeline water that was promised in the Reconstruction and Development Programme, and he complied, and by 1999 the Bank openly declared victory in its Country Assistance Strategy. RSR may have thought he put a damper on PPPs but he apparently was not paying attention. As for 'nationalising' water, yes, the current system is an improvement over Riparian Rights in which water was owned by whom ever owned the land above it. But the real question to ask is whether the system set up by Roberts and his minister has delivered adequate decommodified water to the masses, and it is undeniable that thousands of social protests have occurred because the answer to the question is no.⁸⁰²
Meanwhile the paucity of Roberts’s claims had already been decisively demonstrated by The Accumulation of Capital in Southern Africa: Rosa Luxemburg’s Contemporary Relevance published in 2007: which was co-edited by Bond and included contributions by regional analysts and some of the world’s leading political economists – for example, Elmar Altvater.⁸⁰³ Bond identified three positions on whether the transition from apartheid to democracy in South Africa fundamentally shifted Pretoria’s apartheid-era ‘total strategy’ for dominating regional geopolitics and economics:
First, Thabo Mbeki’s New Partnership for Africa’s Development represents a genuine attempt by a ‘middle power’ with good intentions to uplift the continent economically and install democratic modes of ‘governance’. Second, Mbeki’s project is outright imperialist, with continental ambitions that imply rivalries with competitors in the US, Europe (especially France) and East Asia (especially China). Third, Mbeki’s project has been to situate South Africa as a subimperial partner to the world’s major military and economic powers, insofar as this entails lubricating markets and systems of accumulation by tying Africa into the institutional framework of global capital, and by assisting – as a ‘deputy sheriff’ – in implementing imperial military and socio-political strategies.⁸⁰⁴
Taking the latter position, Bond argued ‘that imperialism, subimperialism and anti-imperialism are settling into durable patterns and alignments in Africa – in large part because of Pretoria’s emerging managerial functions – and the patterns appear consistent with the way Karl Marx and Rosa Luxemburg described the relation between capital, society and nature’.⁸⁰⁵ He begins with “primitive accumulation” and continues by establishing systems of class, racial, gender and environmental power that facilitate accumulation, relatively unhindered by transitions from colonialism and apartheid.⁸⁰⁶ For example, to illustrate South Africa’s ‘subimperial functions’, Bond quotes from Nelson Mandela’s speech to business and social elites at Rhodes House, Cape Town, in August 2003: ‘I am sure that Cecil John Rhodes would have given his approval to this effort to make the South African economy of the early 21st century appropriate and fit for its time’.⁸⁰⁷

In South Africa, the most despised acronym is arguably not HIV, the AIDS virus that infects nearly a quarter of the adult population, but GEAR, the ANC's economic package – Growth, Employment and Redistribution – which in 1995 opened the door to global trade.⁸⁰⁸ This study has shown that the Tories – prior to New Labour – adopted the ‘enabling’ model whereby local government was no longer responsible for the direct provision of services. Similarly, Ahmed Veriava argues that in South Africa
with the adoption of GEAR, the role of local government shifted from a redistributive one to an ‘enabling’ or ‘facilitating’ one….In this way, the central social responsibility of government became one of establishing the means for increasing redress rather than delivering access directly. Under this model, real access has come to be determined by market forces, with the state becoming the facilitator of this logic. In this context, and in line with the state’s attempts at ‘ring fencing’ certain services as [a] possible first step towards their full privatisation, cost recovery interventions became the central concern of municipalities and parastatals involved in the delivery of basic services. In this respect, the central challenge facing municipalities and state parastatals is the problem of non-payment.