2006年-世界发展银行全球_Mobilizing_Urban_Infrastructure_Finance_within_a_Responsible_Fiscal_Framework___South_African_Case_17页_291kb

Summary of "MOBILIZING URBAN INFRASTRUCTURE FINANCE WITHIN A RESPONSIBLE FISCAL FRAMEWORK: SOUTH AFRICAN CASE"

Core Content

This paper discusses the development and implementation of a responsible fiscal framework for mobilizing urban infrastructure finance in post-apartheid South Africa. It highlights the constitutional and administrative changes that have shaped the decentralization process and the financial mechanisms that support local governments in delivering urban services.

Main Characteristics of the Current Approach

1. Constitutional and Administrative Changes

• South Africa transitioned from a racially segregated system to a democratic one in 1994, with a new Constitution passed in 1996.
• The new Constitution emphasized decentralization and the creation of autonomous, financially stable local governments.
• The system of three spheres of government (national, provincial, and local) was established, with local governments responsible for most urban infrastructure.

2. Urban Service Improvements

• Since 1994, there has been significant progress in extending basic services (water, electricity, housing) to poor urban areas.
• Access to clean water increased from 60% to 85% of households between 1996 and 2001.
• Electricity coverage rose from 50% to 70% in the same period.
• Over 1.6 million low-income houses were built between 1994 and 2003.
• Public approval of basic services increased from 30% in 1996 to 75% in 2003.

3. Economic and Demographic Changes

• Urbanization has increased significantly, with metropolitan areas and cities expanding by 21% to 40% between 1991 and 2001.
• The average household size decreased from 4.5 to 3.8 between 1996 and 2001.
• The number of unemployed in urban areas increased from 1.9 million to 4.3 million between 1995 and 2002.
• 54% of the unemployed live in urban areas, with 38% residing in the 9 largest cities and over 25% in informal settlements.

4. Macro-Economic Environment

• South Africa has experienced steady economic growth, averaging 3% per year since 1994.
• Inflation has been reduced from 15% in 1994 to within the target range of 3%–6%.
• The fiscal deficit of general government decreased from 9.5% of GDP in 1993/94 to 1% in 2002/03, and then rose to 2.8% in 2003/04.
• Taxes account for about 26% of GDP, with national government collecting the majority.

Fiscal Framework and Revenue Distribution

5. Inter-Governmental Fiscal Structure

• Revenue Sources: National government holds most revenue-raising powers, while local governments have property taxes, business levies, and user charges.
• Fiscal Transfers: To address vertical fiscal imbalances, a robust grant system is in place, with both unconditional (equitable share) and conditional grants.
• Transfers to Local Government: These grants are used to address infrastructure backlogs and support capacity building in poorer municipalities.
• Metropolitan vs. Rural Municipalities: Metropolitan areas are largely self-financing, while smaller and rural municipalities rely heavily on transfers (up to 87.3%).

Key Financial Mechanisms

6. Municipal Finance Management Act

• The Act emphasizes accountability, transparency, and sound financial management.
• It defines roles and responsibilities of mayors and municipal managers.
• It includes provisions for borrowing, prohibiting the use of external debt for operating expenditure except for bridging purposes.
• It establishes processes for financial recovery and intervention in cases of financial emergencies.

7. Municipal Infrastructure Grant (MIG)

• The MIG consolidates various conditional grants into a single fund to support capital budgets.
• It aims to simplify the grant system and promote financial sustainability.
• It categorizes municipalities based on capacity, with high-capacity ones receiving direct funding, while others receive indirect support and capacity-building assistance.
• The MIG focuses on output-based targets, such as service coverage, employment creation, and integrated development planning.

Borrowing Patterns

8. Borrowing by Metropolitan Municipalities

• Metropolitan municipalities are the primary borrowers, with a total of R12.486 billion in external debt as of March 2004.
• The Development Bank of Southern Africa (DBSA) and the Infrastructure Finance Corporation (INCA) are the main lenders, with DBSA providing over R5 billion and INCA just under R3 billion.
• Loans account for about 60% of Johannesburg's capital financing, with the rest coming from developers' contributions, provincial housing grants, and national infrastructure grants.

9. Municipal Bonds

• The City of Johannesburg successfully floated two general obligation municipal bonds in 2004, totaling R2 billion, without any national government guarantee.
• This demonstrates the potential for municipalities to access private financial markets independently.
• Other municipalities are also considering issuing municipal bonds.

Conclusion

South Africa has made substantial progress in improving urban infrastructure finance within a responsible fiscal framework. The system emphasizes decentralization, autonomy, and financial sustainability for local governments. While challenges remain, the country has established a legal and institutional environment that supports local financial management and borrowing. The shift from national guarantees to independent municipal financing reflects a broader commitment to fiscal responsibility and democratic governance.