Investment alone can't fix Mzansi's woes

A functioning local government sector can catalyse long-term progress and development, not just investment, the writer says.
A functioning local government sector can catalyse long-term progress and development, not just investment, the writer says.
Image: 123RF/dolgachov

Following another investment conference, SA seems well on its way to attaining the goal of raising R1-trillion in investment in five years.

It is encouraging to see foreign and local business committing to pour money into the country's economy.

The value of such investments will be that they translate into benefits for ordinary people and development for communities across the country.

It has become the trend for these benefits to be quantified in the number of jobs to be created through the funding pledged at the conference.

Raising investment is important but is only one part of achieving development. The other is ensuring that the state is capable and geared to directing these funds into priority areas.

This year the figure stands at 412,000 direct jobs with an unquantified number of indirect jobs as well as business opportunities.

Job-creation is a key performance indicator for the government. With the worsening unemployment crisis, it makes sense that successive administrations use job-creation as a measure of progress.

Nevertheless, the focus on job targets does seem to have detracted from a clear development strategy for the country.

The financial commitments made at the conference, and indeed any foreign direct investment, in and of themselves cannot produce development outcomes. They need to be guided by a clear set of developmental objectives and goals.

The focus needs to be on development and reducing inequality and how these jobs targets are aligned to these imperatives.

The constitution places municipalities at the locus of development. Developmental duties of municipalities include promoting the social and economic development of communities.

Economic activity takes place within the ambit of local government. That is where businesses interact with their customers and clients.

Fixing the local government sector is therefore as urgent if not more urgent than securing investment into the country.

It is the local government sector that determines the developmental trajectory of communities.

Local government is enjoined with the great responsibility of ensuring service delivery and promoting the wellbeing of communities. The functioning of municipalities is therefore also an important factor in attracting or repelling investment and industrial activity.

Across the country, there is a crisis of municipalities who are struggling to guarantee consistent water supply and electricity.

By 2018 estimates by the department of co-operative governance and traditional affairs, about 30% of the country's municipalities are dysfunctional, with another 30% bordering on dysfunctionality.

The auditor-general again this year flagged shortcomings in financial and performance management, in compliance with legislation, financial health and development, and maintenance of infrastructure. These, according to the AG, are indicators of accountability failures across most municipalities.

According to the constitution, municipalities have a duty to manage their budgeting, planning and administration "to give priority to the basic needs of the community, and to promote the social and economic development of the community; and participate in national and provincial development programmes".

At the beginning of each term, municipalities engage (or should engage) communities in a process of planning for their developmental needs. This makes municipalities all the more answerable to ordinary people for their failures.

It is unlikely that investment alone will be sufficient to catalyse long-term progress and development that is underpinned by infrastructure development and maintenance, good leadership and efficient and consistent service delivery.

A functioning local government sector can ensure this.

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