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Date : 27/06/2006
Source: The Presidency
Title: Mlambo-Ngcuka: SALGA National Members Assembly


  Address delivered by the Deputy President, Phumzile Mlambo-Ngcuka at the SALGA National Members Assembly, Ethekwini Municipality

The Mayor of eThekwini Municipality, the host City
Councillor Obed Mlaba
The National Chairperson of SALGA
Councillor Amos Masondo
MECs for Local Government
Honourable Mayors and Councillors
Ladies and gentlemen

I am honoured to address this inaugural gathering of all Executive Mayors, Mayors, senior councillors and Municipal Managers in the form of South African Local Government Association (SALGA) National Members Assembly.

Judging from the enthusiastic expression on your faces, I have a deep sense that local government is in good hands and communities across our country can expect quicker and high quality municipal service delivery.

We are hopeful that on a significant occasion such as this one, the congregation of municipal leaders from across our land will adopt meaningful and practical decisions to improve the lives of the vast majority of our people, especially in the areas of job creation, housing, water provision, electrification and sanitation.

South Africa is a Constitutional democracy in which local government is constitutionally defined and empowered, with specific delegated powers. We, in National Government, and indeed the vast majority of our people, acknowledge that significant progress has been recorded in the past five years to establish a new local government system. The experiences and valuable lessons gained over the past five years will undoubtedly serve as a baseline to improve governance and ethical practices in this new and second term of local government.

We also recognise that during the last term of local government, many municipalities experienced grassroots discontent around governance and service delivery issues. But we are certain that with the able and high calibre leadership we have at our disposal, there will be no reason or cause for this discontent to resurface.

The constitution requires the legislative entrenchment of the local government policy framework and this exists in the five municipal Acts. Accordingly, the fundamental requirement of good governance in municipalities is for them to locate themselves, operate and manage themselves, manage their finances and collect their own income in terms of the processes and systems prescribed in both the policy and legislative framework.

With the regulatory framework providing for effective governance systems and processes, the path is clear for good governance to reach new heights at a local government level. Leaders within local government, which includes senior officials in municipalities, will increasingly be called upon to lend impetus and support to the process of public participation in the affairs of communities they serve, be political custodians of good governance and accountability, and to rigorously advocate for the needs of communities.

In February 2006, Cabinet considered a review of the first five years of the current system of local government and adopted government's plan to achieve sustainable municipalities in this term, known as the Five Year Local Government Strategic Agenda. We note and are pleased that the Director General of the Department of Provincial and Local Government, presented to this gathering yesterday a comprehensive outline on the implementation plan of the Five Year Local Government Strategic Agenda.

Included in this is a set of benchmarks for an ideal functional municipality and they are prioritised as follows:

* Municipal transformation and institutional development
* Local Economic Development
* Basic Service Delivery and Infrastructure Investment
* Financial Viability and Financial Management
* Good Governance and Community Participation

Under the last heading, the key performance areas are:

* Functional community participation mechanisms and ward committees.
* Established feedback mechanisms in order to ensure responsiveness to communities.
* Continuous and special attention to historically marginalised and excluded communities.
* Effective intergovernmental relations.

It is encouraging that in this inaugural Assembly your commissions did justice to the issues of our collective implementation plan because all of them deliberated on sound mechanisms that will lend vigour and impetus to this plan.

Municipalities are experiencing difficulties in coordinating and aligning these roles and responsibilities. A very substantial proportion of operational problems and blockages in municipalities arise from an inability on the part of political decision makers as well as administrative officials to agree on the role to be played by each governance structure and political office bearer and to implement an appropriate system of delegation as required by section 59 of the Municipal Systems Act.

Another challenge that faces municipalities is around the issue of the development and the support of Small Medium Micro Enterprises (SMMEs). The small and medium business sector is seriously underdeveloped in South Africa. The contribution of SMMEs to output and to employment is much smaller than in most other countries. We have a long history in South Africa of an environment which does not seem to support the growth of SMMEs.

During the course of last year the Presidency investigated a number of obstacles which stand in the way of the development of small and medium businesses in South Africa. One of these investigations concerned the role of municipalities.

We found that there are no major obstacles for most established formal sector business, except that in some cases licensing systems are not user friendly. For start-ups and informal sector businesses things can be tougher.

The report made a number of recommendations. One was that national government should develop guidelines for municipal practices to support small business development. This proposal was, in fact, adopted by Cabinet in November 2005 and we expect that the Department of Provincial and Local government and the Department of Trade and Industry are currently working on this. We expect that this project will also look at problems with overlapping and contradictory regulatory regimes between the three spheres of government.

Another interesting finding of the investigation was that municipal procurement systems often do not accommodate very small businesses; this is also true at a national level. We are trying to improve national procurement systems to accommodate SMMEs better we would expect that municipalities will be doing the same thing.

There is also scope for imaginative reform in the municipalities’ role as a deliverer of services.
* For an example, could deposits be set at lower levels for certain categories of businesses?
* Are there ways of making decisions about valuation, revenue and debt management more transparent, to reduce unnecessary misunderstandings?
* Can we ensure that payments to small businesses are made with the minimum delay to accommodate their lack of liquidity?
* Is it possible for the municipalities Integrated Development Plans to give sufficient attention to the different types of SMMEs?

There are at least three major categories-micro-survivalist businesses, very small businesses, and small and medium enterprises. They have different problems and different opportunities. They ca not be treated as identical within the Integrated Development Plans (IDPs). There is a lot that local governments can do to improve the environment for small businesses. Of course, the first thing is to make sure that the local government performs all its basic functions well. That it delivers on basic services cleaning, sewage, traffic, power and such core services.

Getting these services right is the basis for economic development. When these basic services are running efficiently and reaching the widest possible community, then we need to focus on key challenges such as the challenge to further improve support for small businesses. There is still much to do. The experience in municipalities is that it has been difficult, if not impossible, to implement an Integrated Development Plan process or a performance management system properly without complying with Section 53 of the Municipal Systems Act and thereafter operate on the basis of the agreed outcomes.

In addition, the lack of proper delegations slows down the speed of decision making, as decisions which could be taken by senior officials, within the framework set by Council, must constantly be referred to a council committee, the executive committee or mayoral committee.

Experience has shown that community participation, which is commonly defined as an open, accountable process through which individuals and groups within selected communities can exchange views and influence decision-making, is an essential part of effective and accountable governance at local level.

One important way of achieving successful and lasting models, to ensure that community participation takes place, is through establishing structures and institutionalised frameworks for participatory local governance. Structures and institutionalised models of participation generally work where there is a political commitment to their implementation.

It has become widely accepted that good communication is an essential part of developmental local government and it is evident that unless communities, across the social economic spectrum, understand the business of the council that they elected and know how their rates and service charges are spent, municipalities are not meting their obligation to be developmental. Experience has taught us that one of the challenges facing the sphere of local government is the matter of corruption.

To provide for the strengthening of measures to prevent and combat corruption, the Prevention and Combating of Corrupt Activities Act was passed in 2003. The Prevention and Combating of Corrupt Activities Act defines a public officer as any person receiving remuneration from public funds. Corruption and the misuse of public funds undermines the Bill of Rights and our Constitution, endangers the stability and security of a society, and undermines the institutions and values of a democracy and ethical values of morality among others.

As a public official, any councillor who directly or indirectly, accepts or agrees or offers to accept any gratification or favour from any person, whether for benefit for himself or herself or for benefit of another person, is guilty of the offence of corrupt activity.

The Department for Provincial and Local Government, together with South African Local Government Association (SALGA), has in the past year rolled out the Local Government Anti-Corruption Strategy in five provinces, each represented by a sample of municipalities. The municipalities targeted by the program are all designated Project Consolidate municipalities.

Honourable Chairperson, in the above regard I am especially pleased with the resolutions adopted by the Governance Commission yesterday and hope that they will be implemented to the letter.

We are truly convinced that municipalities will: * Strictly implement the Code of Conduct for both Councillors and officials in all municipalities.
* Strict adherence to the Supply Chain Management regulations must be vigorously encouraged, enforced and maintained.
* Ways and means must be found to promote and maintain communication between municipalities and communities.
* A process to increase community participation in the planning, implementation and monitoring of the IDP and the budget cycle in all municipalities must be identified.
* The capacity of Ward Committees must be built in order for it to play its rightful role.
* Oversight structures e.g. Audit Committees must be established in all municipalities.

* The proper delegation of powers and functions between governance structures and political office bearers must be clearly defined.

In conclusion let me reiterate that we have all the confidence in our local government structures that they will ensure that they deliver services to the people speedily and efficiently.

I thank you.

Issued by: The Presidency
27 June 2006

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