Demarcation and establishment of municipalities in South Africa and Brazil: comparative notes

1. Demarcation and establishment of municipalities in South Africa and Brazil: comparative notes Brasilia, 6 September 2011 Colloquium: “National minimum criteria for the creation, merger and dissolution of municipalities” Jaap de Visser Professor, University of the Western Cape

2. Relevance of South Africa / Brazil comparison • Similarities in socio-economic context / federal features • uneven distribution of wealth (often defined geographically) • ‘young’ democracies, emerging from era of centralisation • LG as a constituent unit of federation with legislative and executive powers • strong role for central govt. vis-à-vis LG • LG receives funds directly from central govt. • RSA: central govt. power limited to setting rules, provinces ‘establish’ LGs (but…) • developmental model of local government

3. some very basic statistics

4. Local Government institutions in South Africa: historical context • Before 1994, municipalities were – • racially configured • subservient to provincial and national government • illegitimate • fragmented • demarcated and designed to exploit black majority • 1996 Constitution: • constitutional recognition of status, powers and revenue authority of LG • uniform system of LG with limited variation between provinces • developmental mandate for LG • democratically elected municipal councils (combination of constituency / party list)

5. Responsibilities • Constitutionally protected powers over issues such as • urban and rural land use planning • supply of water and sanitation • distribution of electricity • refuse removal • road maintenance • municipal health care • many ‘delegated’ functions (e.g. social housing) • LG performs no social welfare functions • Explicit ‘developmental mandate’

6. Funding • Own revenue • property taxation • surcharges on fees for services • Grants • constitutionally guaranteed ‘equitable share’ (formula-based on poverty data, cost of services etc.) • Unconditional grants (earmarked grants) • Some borrowing by cities • Recent trends • increase in central transfers to LG • dependency on grants varies significantly (urban-rural) • challenge: uncollected debts and maladministration endanger viability of municipalities

7. RSA: rationalisation of number of municipalities after fall of apartheid

8. RSA: rationalisation of number of municipalities after fall of apartheid • DM=District Municipality comprising of a number of Local Municipalities (LMs) – two tiered system • MM = Metropolitan Municipality – one single municipality

9. Who does what?

10. Municipal Demarcation Board • Independent institution, appointed by President • Regulated by Municipal Demarcation Act • Main functions: • Demarcate municipal boundaries • Proclaim metropolitan municipalities • Demarcate constituency boundaries • Compare with Brazil: Feasibility Study, Referendum and Decision of State Assembly combined in one independent body

11. Demarcation of municipal boundaries

12. Section 24 of the Demarcation Act: Objectives of demarcation of municipal boundaries • democratic and accountablegovernment • equitable and sustainable provision of services • promotion of social and economic development • promotion of a safe and healthy environment • effective local governance • integrated development • a tax base that is as inclusive as possible of users of municipal services in the municipality.

13. Section 25 of the Demarcation Act: criteria for municipal boundaries PHYSICAL/EXISTING CHARACTERISTICS • current provincial / municipal boundaries; • areas of traditional rural communities; • functional boundaries (magisterial districts, voting districts, health, transport, police etc.); • topographical, environmental and physical characteristics; REDISTRIBUTION/INTEGRATED PLANNING • need for cohesive, integrated and unified areas, including metropolitan areas; • need to share and redistribute financial/administrative resources; • land use, social, economic and transport planning • need for co-ordination across levels of government

14. Section 25 of the Demarcation Act: criteria for demarcating municipal boundaries FINANCIAL VIABILITY • financial viability and administrative capacity • administrative consequences on creditworthiness, councillors and staff SOCIO-ECONOMIC DIMENSION • interdependence of people, communities and economies (patterns of human settlement and migration, employment, commuting and dominant transport movements, spending, the use of amenities, recreational facilities and infrastructure; and commercial and industrial linkages) REFORM • the need to rationalise the total number of municipalities in order to achieve the objectives of effective and sustainable service delivery, financial viability and macro-economic stability.

15. Procedure • Board, Province or Municipality may initiate procedure • Members of public may request Board to start demarcation procedure (but Board may refuse) • Consultative procedure prescribed: public hearings, preliminary findings, right to object etc. • Board’s decision is final (but may be challenged in Court)

16. Limited number of demarcation disputes • location of a municipality in a particular province (provincial identity, variation in ‘quality’ between provinces) • Constitutional Court has declared certain provincial boundary determinations unconstitutional for lack of public participation (decisions of Parliament) • Generally, decisions of Board are well-respected • Pressure from communities and municipalities absorbed into independent organ

17. Policy debates • What is viability? • Defined only with reference to own revenue? • Does amalgamation in rural areas produce viability? • Metropolitan municipalities ‘too big to fail’? • Size of our municipalities a threat to local democracy?

18. Proliferation of districts in Uganda Uganda: President ‘proclaims’ districts Number of districts from 1990 -2010 Year No of Districts % of growth of Districts 1990 34 3% 1991 38 12% 1994 39 2.6% 1997 45 15% 2000 56 24% 2005 70 25% 2006 79 13% 2010 112 42%

19. Proliferation of districts in UgandaNightmare scenario? Uganda: President ‘proclaims’ districts Number of districts from 1990 -2010 Year No of Districts % of growth of Districts 1990 34 3% 1991 38 12% 1994 39 2.6% 1997 45 15% 2000 56 24% 2005 70 25% 2006 79 13% 2010 112 42% • Background: • local revenues decreased • unconditional grants equal • conditional grants increased • nominally

20. Rough comparison of trend in RSA and Brazil South Africa: • large scale reform was needed to address apartheid fragmentation • enhanced role for local government necessitated strong political entities • independent board has reduced political factor • legislative criteria emphasise viability and redistribution

21. Minimum population numbers? • Demarcation Board’s experience with maximum deviation ratio for constituency boundaries • Criteria for demarcating constituencies (wards) • every ward in the municipality must have approx. same number of voters – deviation may not be more than 15% • avoid fragmentation of communities • community participation • identifiable boundaries • physical characteristics/ electoral management issues • Numbers game sometimes produced ‘Illogical’ ward boundaries, politically unsustainable units – Board had no choice

22. Determining metropolitan status

23. Metropolitan status: • single, self-standing municipality • no complex relationship with ‘district municipality’ • status, profile, political status • ability to attract investment

24. 2000: 6 metro’s (Johannesburg, Cape Town, eThekwini (Durban), Ekurhuleni, Tshwane (Pretoria), Nelson Mandela Bay (Port Elizabeth) • 2011: 2 new metro’s (Buffalo City (East London), Mangaung (Bloemfontein)) • Questions about application of criteria: how objective is it? How objective can it be?

25. Municipal Structures Act: criteria for metropolitan status • high population density • intense movement of people, goods and services • extensive develop­ment • multiple business districts and industrial areas • a centre of economic activity with a complex and diverse economy • need for integrated development planning for entire area • strong social and economic linkages between constituent units

26. Structures Act: “high population density”Indicator: population density (number of people/km2)

27. Structures Act: “multiple business districts and industrial areas”Indicator: number of economic hubs

28. Structures Act: “Complex and diversified economy”Indicator: gross Value-Added by Region

29. Structures Act: “commuting patterns”Indicator: vehicle outflow

30. Comparative observations How do criteria compare with Brazil’s process for creation, merger and dissolution? • RSA no formulae / minimum ratios • Independent Demarcation Board • Case-by-case approach to municipal boundaries • discretion, limited by statutory objectives and criteria • emphasis on redistribution and financial viability • consultation but no popular referendum • Demarcation Board controls the ‘trigger’ • Criteria and independence of Board have assisted in creating predictable institutional framework