P Mlambo-Ngcuka: SALGA National Members Assembly

27 June 2006

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
Source: SAPA