In a new study that makes a strong case for urgent local government reform, one of the world’s top academic publishers has put the spotlight on the chokehold that poor governance, financial mismanagement and infrastructure decay in SA’s metros have on economic growth.
Taylor & Francis, which publishes speciality research spanning social sciences, science and technology, engineering and medicine, said in a research note by Ivan Turok and Justin Visagie that while cities should be employment powerhouses, they were instead dragging down the national economy.
The researchers found a “striking concentration” of employment in cities and discussed both the quantity and character of these jobs.
“The metros have a more favourable and diverse economic structure than towns and rural areas. However, most have performed poorly over the past decade, thereby dragging down the national economy.
“The release of the new data set should encourage further research on spatial inequalities and labour market dynamics,” the researchers said, adding the deteriorating governance of the metros deserves special attention from the national government because of their vital contribution to the economy.
“Most of the metros have performed poorly over the last decade. It is difficult to imagine the national economy prospering as long as the main cities struggle and stagnate.”
SA’s metropolitan areas, home to factories producing items ranging from food and beverages to chemicals and pharmaceuticals are the prime example of wider dysfunction and mismanagement across local government. The smallest unit of government is buckling under the weight of energy and water crises, transport and logistics failures, and blatant mismanagement.
The study comes at a time when the performance of SA’s metros and municipalities is expected to take centre stage as the government unveils Operation Vulindlela 2.0 — a joint initiative of President Cyril Ramaphosa’s office and the Treasury created in 2020 to speed up reforms.
Municipalities owe Eskom a staggering R109.4bn, more than an 18-fold jump in unpaid electricity bills since 2015 when they owed just less than R5bn, risking undoing efforts to stabilise the power utility.
Turok and Visagie said it was unfair and unreasonable to expect the metros to accommodate incomers from elsewhere in decent conditions without substantial state support for public infrastructure and essential services.
The study showed that of all metros the five with the most jobs were Johannesburg, Cape Town, Tshwane, eThekwini and Ekurhuleni, accounting for almost 60% of total formal employment in the country.
“One could argue that this map does not adequately capture the economic significance of the metros because they cover such a small proportion of the country’s territory,” the study says.
“Repeated use of this kind of map over many years could perhaps contribute to the metros receiving less attention than they deserve — or require to realise their potential — from decisionmakers and the people and organisations who influence them.
“None of the eight metros experienced appreciable employment growth in manufacturing and other tradable goods. In fact, the three Gauteng metros all lost jobs in manufacturing. Looked at in more detail, the biggest sources of employment growth in Cape Town have been retail and wholesale services, followed by administrative activities (call centres, labour brokers and security) and finance and insurance.”
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