Statement by Mr Andries Nel, MP,
Deputy Minister for Cooperative Governance and Traditional Affairs
at the State of the Cities Report 2016 Media Briefing on
22 June 2016, Johannesburg
Chair of the SACN,
Members of the Media,
Thank you for joining us here today. Our congratulations go to the South African Cities Network, its chair, Executive Mayor of the City of Johannesburg, Councillor Parks Tau, Chair of the State of the Cities Report 2016 Committee, Councillor Kgosiento Ramokgopa, and the CEO of the SACN, Mr Sithole Mbanga and staff, for producing yet another insightful and timely report on the state of our cities.
What makes this year’s report even more important is that it is released on the eve of our fourth fully democratic local government elections. This year’s report tracks our progress over the last 15 years of democratic local government.
The Report highlights the many achievements that have transformed our urban landscape from apartheid construction to democratic spaces in which all citizens are free to interact.
We believe the Report is a further indication of the progress we have made in deconstructing the apartheid city and improving service delivery.
It comes after the release of the Auditor-General’s Report on Municipal Finances that indicated a considerable improvement in Audit Outcomes in the past 5 financial years from 2010/11 to 2014/15.
Out of 278 municipalities 163 municipalities (or 59 percent) received financially unqualified audit outcomes for the 2014/15 financial year. This is up from only 130 (or 47 percent) in 2010/11.
Equally important is the dramatic decline in municipalities receiving disclaimed audit opinions. Only five years ago 33 percent (or 84 municipalities) received disclaimers. This is was down to 11 percent (or 29 municipalities) by 2014/15.
A disclaimer is one of the worst possible audit outcomes. It means the institution being audited was unable to provide the auditor with adequate records to even express an opinion. This is an environment in which fraud, corruption, waste and inefficiency can thrive.
For this reason the Department of Cooperative Governance has set a target of zero disclaimers by 2018/19.
Local government spent R347 billion rand during the 2014/15 financial year. According to the Auditor General R277 billion (or 80 percent) was spent in municipalities that received financially unqualified audit outcomes.
This means that eight out of every ten rand spent by local government has been accounted for in terms of the law and applicable audit standards
Stats SA’s Non-Financial Census of Municipalities reiterated the improvement in service delivery at municipalities, especially in the provision of water, electricity, sewerage and sanitation and solid waste management. This included the delivery of Free Basic Services to 12 million people.
Last year the UN Sustainable Development Goals were released. Goal 11 focuses on making cities inclusive, safe, resilient and sustainable.
In October the United Nations (UN) Habitat 3 conference on Housing and Sustainable Urban Development takes place, with the goal of determining the New Urban Agenda. Clearly cities and urbanisation are firmly on the world’s agenda.
The UN indicates that 54 percent of the world’s population lives in urban areas. This is expected to increase to 66 percent by 2050.
In South Africa, 63 percent of the population is currently urbanised. This is expected to increase to 71 percent by 2030. South Africa is well-positioned to reap the benefits of the “urban dividend”, where an increase in an economically active population, triggers greater economic activity, greater productivity and higher growth rates.
One of the primary findings of the report is the city’s role as drivers of growth and development. And how it is vital that we all work together. Cities drive the world’s economy.
The 600 biggest cities account for more than 60 percent of global GDP. The top 20 house a third of all large corporations, and account for almost half of their combined revenues. South Africa’s metros accounted for 44 percent of GDP in 2012.
According to the Centre for Development and Enterprise the eight largest cities are home to about 37% of South Africans, yet they account for 59% of economic activity.
The Global Cities 2030 study predicts that the City of Johannesburg will be the biggest city on the continent in 2030 in terms of GDP, contributing $196 billion, with the City of Cape Town placed fourth at $73 billion. Five of South Africa’s metropolitan areas were ranked among the world’s 300 largest.
Cities ignite growth through their policies and actions. Our metros growth rate is higher than that of the country generally. We believe that as government we have already taken steps to ensure that our cities improve their efficiencies to function optimally.
Last year we launched the Sub-National Doing Business in South Africa report, which highlighted both the progress and shortcomings of doing business in our metros.
The National Treasury’s Cities’ Support Programme provides further support to enhance the institutional capabilities of cities.
The Gauteng province’s Township Revitalisation Strategy is another element in working towards a city that is more economically inclusive.
The Back to Basics programme, launched by CoGTA in 2014, is already showing improvements in the areas such as promoting good governance, sound financial management and building institutional capabilities. We believe this will lay a solid foundation for fostering economic growth.
One of the key findings of the Report is that spatial transformation is critical to the growth and development of cities.
Following the release of the 2011 State of the Cities Report we embarked on a process to develop a more coherent approach to urbanisation. We are happy to report that the Integrated Urban Development Framework (IUDF) was adopted by Cabinet in April this year.
The IUDF sets out the policy framework for transforming and restructuring South Africa’s urban spaces, guided by the vision of creating ‘liveable, safe, resource-efficient cities and towns that are socially integrated, economically inclusive and globally competitive, where residents actively participate in urban life’. It offers a New Deal for South Africa’ Cities and Towns.
It also emphasizes the inextricable link between urban and rural development and the need to strengthen development throughout the urban-rural continuum.
As the Departments of Cooperative Governance and Traditional Affairs, we welcome the 2016 State of the Cities Report.
We believe it will go a long way towards reinforcing the role that cities play in economic growth.
We are committed as national, provincial and local government to build on the progress of the past 15 years and to re-double our efforts in contributing towards integrated urban and rural development.
I thank you.
Ministry for Cooperative Governance & Traditional Affairs
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