South Africa’s municipalities aren’t repairing roads, providing clean water or keeping the lights on: a new study explains why

South Africa has a massive infrastructure problem. Roads, electricity supply and water management are just three areas where signs of collapse and deterioration are increasing. This applies to large cities such as Johannesburg as well as small towns and rural areas.

This is a problem because such infrastructure has enormous economic benefits. Water and electricity enable companies to run smoothly. Local roads improve mobility and access to markets.

A 2018 study by the South African Finance and Taxation Commission showed that infrastructure spending had a statistically significant positive impact on local employment and economic growth.

The responsibility for maintaining these essential services lies with South Africa’s 257 municipalities. Funding comes from two sources: central government funds; and revenue generated locally through the provision of services.

The national government has increased its financial transfers to municipalities for infrastructure investments by more than 3.5 times in local currency over the last 14 years. During this period, municipalities received almost 600 billion rand ($45.5 billion) from the national government.

Why do local governments have little to show for it?

We have been researching South Africa’s public finances and intergovernmental financial relations issues for many years. In a recent article we examined how local authorities have managed the provision of infrastructure.

This is what we found out:

Municipalities have failed to effectively use the increased infrastructure allocations

Municipalities have not selected the right infrastructure projects

Projects were not implemented cost-effectively

Projects were not completed on time and within budget

The infrastructure was not operated efficiently

The existing infrastructure was not maintained.

We encountered the following errors.

Human resources: Most of South Africa’s 257 municipalities lack the necessary capacity to manage infrastructure. Few have fully equipped project management units. In addition, there are cumbersome and expensive infrastructure planning processes and legal requirements. For example, municipalities must conduct a feasibility study for each project and appoint a steering committee. The amount of resources required is overwhelming for many and the process simply shifts limited resources away from the actual infrastructure work.

These problems persist despite years of reforms and increased technical and financial support.

Poor distribution of resources: Most national government allocations for infrastructure came in the form of conditional grants. This sets conditions for what type of infrastructure the money can be spent on.

However, this has not resulted in grants being awarded for extended or abandoned projects. The result is that many municipalities use recurring budget allocations to correct poor execution and abandoned projects.

Political interference: Where infrastructure has been built, it is not well maintained. This is partly because politicians tend to favor new infrastructure that provides opportunities for ribbon-cutting ceremonies. But some of this infrastructure does not meet the needs of communities and becomes a white elephant.

Bureaucracy: For some local infrastructure investments, municipalities share responsibility with national and regional governments. But there is no joint planning and budgeting. Therefore, water and electricity networks are often installed without sufficient mass supply from the relevant providers.

Service delays then lead to community protests and vandalism of infrastructure.

The role of national government bodies also creates problems. They are the administrators of conditional funding for infrastructure grants. In this role, they often intervene and dictate priorities to municipalities while attaching strict conditions to funding.

Lack of ownership: Frustrated by the continued inability to spend infrastructure funds, the national government is increasingly implementing projects on behalf of municipalities, often using indirect grants. The result is that municipalities have no sense of responsibility for the infrastructure and are not interested in maintaining it. Some of the landfills and sports facilities built by the national environment and sports ministries have been neglected.

We also found that communities are struggling to keep up with growing populations, rising production costs and infrastructure destruction.

Our findings are confirmed by auditor general reports highlighting weak management of local authority infrastructure delivery.

The Auditor General’s 2021-2022 report found that the average delay in completion of infrastructure projects was between 17 and 26 months.

It also found that all 257 municipalities had spent just 18 billion rand ($1.2 billion) on infrastructure maintenance. This represents 4% of the total value (R450 billion or US$30.6 billion) of municipal assets. This low expenditure increases the risk of infrastructure failure and lowers service level standards.

In addition, the pace and costs of modernizing and replacing infrastructure are increasing rapidly.

The failure to provide infrastructure has itself affected the financial stability of municipalities. Because they can generate their own income by selling water and electricity to residents. A collapse of these services will result in the loss of this revenue.

However, debates about municipal infrastructure in South Africa have largely focused on funding deficits. This ignores weaknesses or a lack of municipal capacity to manage infrastructure projects. Giving municipalities money for infrastructure is no guarantee of high-quality and long-lasting infrastructure.

Municipalities must:

Focus on full infrastructure lifecycle management rather than just launching new projects

Plan relevant infrastructure that responds to local conditions

Maintaining old and new infrastructure

Renovation of infrastructure that is nearing the end of its useful life.

None of this can be achieved without competent and forward-looking local government leadership.