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Urban Renewal Key for South Africa’s Economy

The Ministry of Cooperative Governance and Traditional Affairs (CoGTA) welcomes the budget speech delivered by the former Minister of Finance on 21 February 2018. The speech made specific reference to the importance of urban renewal and spatial transformation, and how cities are at the heart of our national economy. Minister Gigaba emphasised this as a significant dynamic to drive inclusive growth, and identified the Integrated Urban Development Framework (IUDF) as South Africa’s policy commitment to improving the productivity of urban areas as well as positioning South Africa to better respond to our urban development challenges.

Once more, this puts more emphasis on the importance attached to driving the implementation of the IUDF across South Africa’s cities and towns. ”By revitalising the township economy and reconfiguring our urban centres, we are radically transforming the unequal planning of our cities”, the Minister said.

As the economic importance of cities is likely to increase, Minister Gigaba urged that achieving growth and inclusivity would require us to re-think our approaches to South Africa’s urban development challenges, and to find new ways in which to stimulate faster and more inclusive growth.

The IUDF has highlighted how well-managed urbanisation has the potential to address South Africa’s triple challenges of poverty, inequality and unemployment. The IUDF points out that South Africa is a middle-income country with large-scale unemployment, but our cities and towns have significant ‘transformative potential’. The Minister further highlighted that the importance of coordinated public and private investments, and catalysing private sector investments.

Census results have shown that it is imperative to proactively manage urban development as it is underscored by the urban reality. In 2011, 63% of South Africans resided in urban areas, but, as the NDP forecast, this figure is likely to increase to 70% by 2030, implying that three out of every five people will live in urban areas.

With the vision to create liveable, safe, resource-efficient cities and towns that are socially integrated, economically inclusive and globally competitive where residents actively participate in urban life, the IUDF presents its directive by way of four key imperatives. These are economic, inclusion, spatial transformation and institutional development.

Minister Gigaba’s Budget speech rightfully indicates that cities are the heart of the national economy and hold the potential to drive our economic renewal. South Africa’s eight metros are home to 39% of our population but account for half of all employment (formal and informal) and 57% of the country’s economic output.

How can the revitalisation of township economies, economic infrastructure investments and catalysing private sector investments assist in achieving the IUDF goals?

  • South Africa needs partnerships across all sectors to stimulate both informal and high value economic activities in our urban centres. These investments need to be targeted according to the reality that different cities and towns face their own unique spatial and industrial configurations. Through sustainable economic interventions, we can challenge economic decline, marginalisation of   periphery economies, decaying infrastructure and dependencies on single economic sectors.

 

  • Government is also alert to the potential of our intermediate cities, that are smaller than the metros, but still significant urban centres. These cities do not have large economies, but tend to have high population densities and resources that can be better utilised – e.g. in mining, manufacturing and agricultural processing (e.g. Polokwane).

 

  • The better to respond to the urban development challenges they face, one element of the IUDF implementation approach is to target such cities for dedicated programme of support, in order to grow their infrastructure and economic opportunities, and enable more spatially just and well-planned urban environments. The Budget proposes to introduce a new; more flexible grant funding arrangement for these cities over the medium term concretises the intended fiscal framework of support for the IUDF’s Intermediary Cities Programme and this is greatly welcomed by CoGTA.

 

  • Cities will be able to opt to join this new grant, which will require more integrated long-term planning and a greater contribution to infrastructure investment from their own resources.

 

  • Through such interventions, we are tackling spatial injustice and marginalised economies. Progressively, through whole-of government and ‘whole of society’ approaches to implementation of the 9 policy levers of the IUDF, South Africa will be indeed ‘transforming the unequal spatial planning of our cities.

 

Enquiries:

Legadima Leso

Cell: 083 378 9495

CoGTA Communications