SOUTH AFRICAN CITY FINANCES Sustainable Development in the Urban Age Presentation Faculty of Law, North-West University Danga Mughogho
Main Message Citizens and cities are in financial crisis. The problem is systemic, but an alternative trajectory is possible. 2
Citizens in Crisis • Growth in the cost of municipal bills is a focus of consumer concern. • Most metros have regressive tariff structures 3
Increasing Cost of Municipal Bills 4
Municipal Bills are Regressive 5
Affordability of Municipal Bills 6
Affordability of Municipal Bills 7
Systemic Problems – Financing Spatial Transformation • South Africa’s national urban agenda prioritises urban densification. • The gap between city finance and spatial transformation needs to be bridged. 8
Revenue Impact of Development 9
The Revenue Incentive 10
Systemic Problems – Financing Infrastructure • Metros have a funding gap of between 10% and 38% of their capital expenditure. • Unless this funding gap is closed, metros will not be able to meet their core mandates over the medium to long term. 11
The Capital Funding Gap 12
Future Challenges • Electricity is both a major energy source and a central component of big-city finances. • South Africa is one of the countries most affected by climate change, resulting in economic losses, which are amplified in cities. 13
Chapter Outline STATE OF CITY FINANCES 2018 CHAPTER OUTLINE SECTION/THEME CHAPTER CONTENT • Financial 1 State of City Finances & Financial Performance Legacy chapter • 2 Sustainability and Equity: The Tariffs Story Legacy chapter Performance • 3 Financing Spatial Transformation Property rates as a good government tax • The link between sprawl and property rates • Towards an alternative revenue logic • The Case for Fiscal 4 The Growing Funding Gap Building on IGR/PDG report • Transformation Investigating the fiscal gap and proposing solutions • 5 Localising Taxation Building on SACN AMFM study • Assessing alternative own revenue streams for cities • 6 Sustainably Financing Effective Public Transport Systems Alternative sustainable finance mechanisms for urban public transport • Assessing alternative mechanisms for sustainable financing of public transport in SA cities • 7 Cities and the Diversification of Energy Sources The role of cities in electricity provision The Rising Cost of • The role of electricity revenue in city finance Cities • Energy sector transition and city responses • 8 Financing Climate Change Adaptation and Resilience Understanding climate risks and the adaptation finance landscape • Investing in resilience and adaptation • The fiscal impact of climate events • Smarter cities: Efficiencies of public services and infrastructure Emerging • Digital democracy: Block Chain and public services Two page spreads – distributed across the document Innovations • Transparency: mSCOA • Participation: Civic technology 14
DANGA MUGHOGHO danga@sacities.net 15
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