SCODA is a city-centric data portal that aims to support the planning,
management, monitoring, and reporting needs of cities.
The unemployment rate remains at an unfortunate 26.7% in South Africa. Curbing this rate has been a great challenge for the South African government, especially with the mismatch in the job demand and supply in the country. Public employment programmes such as the Department of Public Work’s Expanded Public Works Programme play a crucial role in creating employment for the country’s surplus of unskilled and semi-skilled labour.
Recent statistics from Stats SA show that the majority of people who are not in employment, education or training (NEETs) in South Africa have some level of secondary schooling, but no matric. This implies that most of the people that are unemployed are either unskilled or semi-skilled.
South Africa therefore requires a job demand of unskilled-semi skilled labour to absorb the majority of its unemployed. More of these jobs are required to absorb people who are losing their jobs in the agricultural and mining sectors. However, most of the jobs available require a skilled and professional labour force, making it difficult for the majority of job seekers to find jobs that match their skill levels.
Programmes like the Expanded Public Works Programme (EPWP) become important in the South African context as they offer job opportunities and training to the unskilled and semi-skilled labour force in the country.
The EPWP has created over 3.5 million work opportunities for the unemployed nationally, with a targeted 6 million work opportunities for Phase 3 (2014-2019).
In the period 2017/18, the South African cities have implemented 1448 EPWP projects that have created over 90 thousand work opportunities in their cities.
These projects provide poverty relief for the poor and the large number of unemployed economic immigrants that move to the city to seek employment.
If you have any queries and further comment on this datastory, please email Sadhna Bhana at SACN.
Cities worldwide generate about 80% of the gross value added in their respective countries. Due to their association with opportunity and better livelihoods, about 60% of the South African population live in its cities and towns. However due to inequality, among other factors, cities have high levels of violence and crime.
SOURCE: UN DESA (2014)
Since at least the 1970s, South Africa’s murder levels have not been below 30 per 100 000, which is considered very high by global standards - only a handful of countries record murder rates at this level.
Comparative internationla research shows that a very strong predictor of a country’s level of crime and violence is its level of inequality. As measured by its Gini coefficient, South Africa is one of the most unequal countries, if not the most unequal country, in the world.
Addressing inequality must no longer be considered an abstract and long-term ideal. It is a matter of life and violent death.
SOURCE: Quantec Research (2015)
South Africa records among the highest murder rates in the world. Although the country has almost halved its murder rates since 1994, they remain worryingly high. In the past 4 years, following an all-time low in 2011, murder rates have steadily climbed. This is cause for concern.
From national statistics, cities record the lion’s share of crime:
Because crime and violence have a distinctly urban character, there’s a need to focus on cities through research aimed at reliably establishing what drives crime trends and what the right responses should entail.
The need to focus research on cities is because national crime statistics do not reveal the actual distribution of crime and violence. City level data is therefore essential. For example, some South African metros record murder rates above the national average.
Fear and perceptions often trump actual rates of crime. This has a direct effect on how urban residents engage in public life and their feelings of safety in public space.
JHB |
CPT |
ETH |
EKU |
TSH |
NMB |
MAN |
BCM |
MSU |
|
|---|---|---|---|---|---|---|---|---|---|
8. Experience of crime/ violence |
10% |
11% |
6% |
8% |
9% |
8% |
6% |
8% |
8% |
9. Feelings of safety/ fear of crime |
24% |
28% |
23% |
22% |
19% |
26% | 21% |
27% |
23% |
10. Perception/satisfaction with law enforcemente |
58% |
49% |
56% |
66% |
50% |
59% |
62% |
44% |
61% |
The nine metropolitan cities of South Africa are where most crime types occur. At the same time they are places of opportunity, with a significant role in improving livelihoods.
City level data and evidence are critical to planning and practice that respond to the structural and place-specific drivers of violence and crime; so that cities are safe, liveable and inclusive.
Where can I read the full report? See the SACN and SaferSpaces webpages.
Download and analyse data at the SCODA webpage
Are there events I can join? (mini launches of the Report in SACN member cities – TBC)
What other publications should I be reading on this topic?
A key message from the State of City Finances 2018 report is that citizens are in crisis. Although growth in the cost of municipal bills has slowed over the past two years, consumers are concerned by increased electricity and water costs, especially in an economic environment of rising costs generally.
To these characteristics are added city tariffs for sanitation, other standard monthly charges added to household bills, and VAT on service charges
TABLE 1: Standard Service Packages
| SERVICE PACKAGES | PROPERTY VALUE (R) |
ELECTRICITY CONSUMPTION (khw/month) |
WATER CONSUMPTION (kl/month) |
SOLID WASTE (weekly removal of a 240l bin) |
|---|---|---|---|---|
| Type A | 100 000 | 400 | 20 | 1 |
| Type B | 250 000 | 500 | 25 | 1 |
| Type C | 500 000 | 800 | 30 | 1 |
| Type D | 1 000 000 | 1500 | 40 | 1 |
Source: State of City Finances Chapter 2, p. 38
Figure 1 shows that between 2015 and 2017, the cost of all service packages increased in all cities, with the exception of Nelson Mandela Bay (Type D) and Mangaung (Types A and B). Cape Town increased the cost of all its service packages at well above the average growth for the nine cities. (this increase was driven by higher charges for water combined with the abolition of the free 6kl for non-indigent households).
All this is important, but are the bills affordable?
The affordability of municipal bills depends on both the municipal rates and charges and household incomes. The distribution of household incomes is used to create benchmark household income categories ranging from about R3 000 to R 50 000, which are associated with the four service packages A, B, C, and D.
FIGURE 1: Average annual real growth in the cost of service packages by city between 2015 and 2017
Source: State of City Finances, Chapter 2, p. 46.
An affordability analysis, which used an affordability threshold of 10% maximum of household income spent on tariffs, found that most Type A and B service packages are unaffordable.
The following two images show the ranking of all municipal bills across all cities from least affordable (in red) to most affordable (in green). The least affordable bills, across all cities, correspond to the service packages A and B associated with lower income consumers, while the most affordable bills correspond to the service packages C and D associated with higher income consumers.
TABLE 2: Affordability of municipal bills
| CITY | PACKAGE TYPE | 2017 BENCHMARK MUNICIPAL BILL (2017 RANDS) | MUNICIPAL BILL AS % OF BENCHMARK INCOME - 2015 | MUNICIPAL BILL AS % OF BENCHMARK INCOME - 2017 | CHANGE IN AFFORDABILITY SINCE 2015 |
|---|---|---|---|---|---|
| BCM | Type A | 1212.75 | 16.9% | 15.3% | -1.6% |
| JHB | Type A | 1128.28 | 15.5% | 14.3% | -1.2% |
| TSH | Type A | 1125.58 | 15.8% | 14.3% | -1.5% |
| ETH | Type A | 951.35 | 12.8% | 12.0% | -0.7% |
| CCT | Type A | 928.12 | 11.2% | 11.8% | 0.5% |
| NMB | Type A | 919.44 | 12.9% | 11.6% | -1.2% |
| MSU | Type A | 906.53 | 12.4% | 11.5% | -1.0% |
| MAN | Type A | 884.99 | 13.0% | 11.2% | -1.8% |
| EKU | Type A | 754,46 | 9.8% | 9.5% | 0,3% |
| BCM | Type B | 1616.71 | 11.2% | 10.2% | -1.0% |
| JHB | Type B | 1581.54 | 11.0% | 10.0% | -0.9% |
| TSH | Type B | 1514.19 | 10.6% | 9.6% | -1.0% |
| CCT | Type B | 1514.14 | 9.7% | 9.6% | -0.1% |
| EKU | Type B | 1 010,75 | 6,6% | 6,4% | -0,2% |
| MSU | Type B | 1302.06 | 9.2% | 8.2% | -1.0% |
| ETH | Type B | 1285.95 | 8.7% | 8.1% | -0.6% |
| NMB | Type B | 1266.99 | 8.8% | 8.0% | -0.8% |
| MAN | Type B | 205,47 | 8,6% | 7,6% | -1,0% |
| BCM | Type C | 2516.60 | 8.8% | 8.0% | -0.8% |
| CCT | Type C | 2464.67 | 7.9% | 7.8% | -0.1% |
| MAN | Type C | 1205.47 | 8.6% | 7.6% | -1.0% |
| TSH | Type C | 2282.85 | 8.1% | 7.2% | -0.9% |
| JHB | Type C | 2132.00 | 7.5% | 6.8% | -0.7% |
| ETH | Type C | 2106.12 | 7.2% | 6.7% | -0.6% |
| EKU | Type C | 1 991,16 | 6,8% | 6,3% | -0,5% |
| MSU | Type C | 895,64 | 6,6% | 6,0% | -0,6% |
| NMB | Type D | 3 693,33 | 6,7% | 5,8% | -0,9% |
| EKU | Type D | 5 614,24 | 9,8% | 8,9% | -0,9% |
| TSH | Type D | 4019.77 | 7.2% | 6.4% | -0.8% |
| MSU | Type D | 3 305,90 | 5,7% | 5,2% | -0,5% |
| MAN | Type D | 3 466,00 | 6,0% | 5,5% | -0,5% |
| JHB | Type D | 3531.23 | 6.2% | 5.6% | -0.6% |
| CCT | Type D | 4 726,64 | 7,4% | 7,5% | 0,1% |
| BCM | Type D | 4 198,35 | 7,4% | 6,6% | -0,7% |
| ETH | Type D | 4 052,74 | 7,0% | 6,4% | -0,6% |
All this to say that the ordinary consumer considers the costs of a municipal bill in relation to the other monthly, and other expenses that they face, and their income.
Data Story 1 Affordability (sub-story linking affordability to regressiveness, and the cost of bills relative to income more broadly)
Cities have generally regressive tariff structures. This means that municipal bills account for a proportionally greater share of the income of poorer households than that of wealthier households.
FIGURE 2: Cost of packages Type A to D as a percentage of benchmark houshold incomes (2015 - 2017)
The nine cities have adopted different tax and tariff strategies in response to different mixes of business and domestic customers, and of low-, middle- and high-income households. Despite this diversity, a number of general conclusions can be drawn from the analysis.
Read more SACN publications and research on municipal finance matters on the SACN website
Engage with SACN’s State of Cities Reporting for broader cities development context since 2004
Explore municipal finance’s interactively on National Treasury’s Municipal Money Datatool
Explore the full collection of State of Cities Finances 2018 datasets on SCODA’s data portal
If you have any queries and further comment on this datastory, please email Danga Mughogho at SACN.
Despite the fact that South Africa’s national urban agenda prioritises urban densification, the municipal revenue model, which is dependent on property rates, incentivises urban sprawl.
What explains why our cities continue to sprawl, and despite policy prescriptions, urban planners and finance departments seem powerless to prevent this happening?
FIGURE 1: Impact of Brownfield and Greenfield developments on per-property municipal revenue
Source: State of City Finances Chapter 3, p. 78.
Greenfield development is development from land zoned for agricultural use, while brownfield development is a proxy for the rezoning of industrial use urban land.
As Figure 1 shows, both brownfield and greenfield developments have a positive impact on revenues in all nine metros, but greenfield development has a significantly higher impact.
Source: State of City Finances Chapter 3, p. 81
The demand to increase revenue makes cities focus on the gains to be made from greenfield development rather than brownfield development.
The two columns show the fiscal consequences of greenfield vs brownfield development.
A completed greenfield development will generate significantly higher revenue from property rates because of the lower value of rates payable on agricultural land.
The bottom row of the graphic shows very clearly the quantum difference in the percentage increase in the revenue received per property in a greenfield vs a brownfield development.
The gap between city finance (core revenue model) and spatial transformation needs to be bridged, to ensure that the desired spatial objectives are incentivised and built into the day-to-day running of cities.
Read more SACN publications and research on municipal finance matters on the SACN website
Engage with SACN’s State of Cities Reporting for broader cities development context since 2004
Explore municipal finance’s interactively on National Treasury’s Municipal Money Datatool
Explore the full collection of State of Cities Finances 2018 datasets on SCODA’s data portal
If you have any queries and further comment on this datastory, please email Danga Mughogho at SACN.
While revenues are sufficient to cover operating expenditures in the metros, they do not generate enough internal finance to fully fund capital expenditure.
The funding gap is the difference between the metros’ available revenue and capital finance, and the operating and capital expenditure required to adequately deliver on their mandates, and poses a risk to the ability of metros to provide and maintain adequate infrastructure in the medium to long term. The sources of capital finance and the funding gap for the metros is shown in figure 1.
The funding gap is shown in purple while the percentages on top of the bars indicate the funding gap as a percentage of capital expenditure in each city. It ranges from 12% in Buffalo City to 73% in Johannesburg.
FIGURE 1: Availability of capital finance and resulting funding gap
Source: State of City Finances Chapter 4, p. 91.
Cities can and should take steps to close the gap but need policy support at national level to develop and implement alternative revenue models.
Read more SACN publications and research on municipal finance matters on the SACN website
Engage with SACN’s State of Cities Reporting for broader cities development context since 2004
Explore municipal finance’s interactively on National Treasury’s Municipal Money Datatool
Explore the full collection of State of Cities Finances 2018 datasets on SCODA’s data portal
If you have any queries and further comment on this datastory, please email Danga Mughogho at SACN.
