The State of South African Cities

About two weeks ago I went to Johannesburg to attend the launch of the State of the Cities report, compiled by the SA Cities Network. They analysed the health of the country’s main municipalities across a number of areas and looking at a number of factors. Here are some the things I pulled out. It is a lot of reading… Sorry.

I have attached the full .pdf documents of the report, the summary and the statement released at the press conference where the report was released. They are available for download.

Orignially published in the Sunday Tribune on April 24, 2011, page 10.

Original story, as published in the Sunday Tribune, April 24, 2011.

WANT MORE PAY? HEAD TO JOBURG

A long-held belief has finally been proven. If you want to make more money,move to Gauteng. Matthew Savides reports

IT’S official: if you want to earn a bigger salary, Gauteng is the place to be. Salaries there are “nearly 70 percent higher than the national average”. This is according to the State of the Cities report, which analysed the health of the country’s nine major municipalities – eThekwini, Joburg, Cape Town, Tshwane (Pretoria), Ekurhuleni (Benoni), Nelson Mandela Bay (Port Elizabeth), Msunduzi, Mangaung (Bloemfontein) and Buffalo City (East London) – in terms of their economy, built environment, environmental sustainability, levels of good governance and the state of their finances. The report was released in Joburg this week.

Apart from confirming the belief that pay is better in Gauteng than elsewhere, the report also states that many municipalities are struggling with cash flow, have high levels of unemployment, are battling with housing backlogs and will soon face shortages of natural resources, especially water.

Figures contained in the document show that salaries are significantly higher in the metro municipalities than they are in secondary cities and the more rural areas of the country. In Tshwane, salaries are, on average, R58 000 a year, Joburg’s are R56 000, Ekurhuleni’s are R51 000 and Cape Town’s are R55 000. Durbanites earn R40 000 a year and Pietermaritzburg workers R37 000. The South African average is about R36 000.

According to the report, the reason for this is that the economies in the major cities “are more productive than other parts of the country”. The three Gauteng municipalities alone account for more than 32 percent of South Africa’s total economic output and the six metros combined account for 55 percent of the national total.

According to Professor Ivan Turok of the Human Sciences Research Council, the strength of the nine main municipalities has resulted in a number of challenges. “The economic gap between the nine cities and other parts of the country is possibly bigger than anywhere else in the world – and it has widened over the past 10 years,” he said.

“But the welfare gap has narrowed at the same time, which is evidence that access to services has improved in rural areas. While this has created some jobs, it hasn’t been enough to ensure that the economic gap narrowed.”

This means more people are moving to the cities to find jobs. “There is a much better chance of getting a job in the metros than anywhere else in the country,” said Turok. “The chance of a person being in a low-paying job is higher in the non-metros… The quality and quantity of jobs is higher in the metros than anywhere else.

SA Cities report cover

“But the employment level in these cities is still very low, especially compared with the international norm. Fortythree percent of the national adult population is unemployed. This has also meant that the Gauteng metros were much harder hit by the recession than any other area.”

As people move to the cities, municipalities have to start taking services to them. This is where many challenges lie. According to the report, about 700 000 people are living in informal housing in the three Gauteng metros alone, compared with about 200 000 each in eThekwini and Cape Town. The three secondary municipalities have a combined number of 500 000. There are also large numbers of people without access to services such as water and electricity.

But again, Turok said, these services were still more readily available in main cities than rural parts of the country.

Despite the challenges outlined in the report, Deputy Minister of Co-operative Government Yunus Carrim said the cities had performed well, given that many of the issues were out of their control. “For all the difficulties the cities have experienced over the past 10 years, the report points to the resilience they have shown, and will need, to deal with issues largely beyond their control, such as inmigration, fluctuations in the global economy, levels of foreign investment and aspects of climate change,” he said.

…BUT IF IT’S QUALITY OF LIFE YOU’RE AFTER, DURBS HAS MUCH TO OFFER

Standard of living: Cape Town is the best place to live in South  Africa – at least for access to housing, transport, health care and schools.  In Cape Town, the State of the Cities report says, the number of unmet needs is lower than anywhere else, followed by eThekwini and Joburg. Nelson Mandela Bay consistently has the most unmet needs, followed by Tshwane.

Also, the quality of services is better in Cape Town than anywhere else. Again, eThekwini comes in second with Joburg not far behind. However, even Cape Town’s quality levels are at little more than 50 percent.

“There is no room for complacency, since eventhe best-performing metros are achieving only half their potential… people with low incomes (who have the most acute need for basic services) are generally more dissatisfied with municipal performance than people with medium and higher incomes…” the report states.

Time in traffic: Ten percent of Gauteng’s population spend between 60 and 90 minutes getting to work, and a further four percent spend more than 90 minutes getting to work. This is compared to just 4 percent and 1 percent respectively in eThekwini. Forty-six percent of Durbanites take 15 to 30 minutes to get to work and 17 percent take even less.

“A study in Tshwane found the average trip length for car users to be about twice as high as in cities such as Moscow, London, Tokyo and Singapore, and about three times as high for public transport users,” the report says.

In terms of mode of transport, more than 40 percent of people in metro areas use their own cars, about 28 percent minibus taxis, eight percent buses, 11 percent trains, and nine percent walk.

Educational level: People tend to be better qualified in Gauteng than anywhere else. “Nearly a third of the Gauteng metro workforce has a tertiary qualification, compared to about one in seven in rural areas. A third of workers in commercial farming have no secondary education, compared with about one in twenty in the metros,” the report states.

In eThekwini, 22 percent of the population has a tertiary qualification, 70 percent have a secondary qualification, seven percent a primary qualification and just one percent has no schooling at all.

Housing: More than 200 000 people in eThekwini live in informal housing. It’s about the same figure as in Cape Town. In the Gauteng metros combined, this is about 700 000. The challenge facing housing, the report adds, is high levels of migration from rural to urban areas for jobs, better services and improved quality of life. eThekwini is the only metro to have reduced the number of people in informal housing – “which may be linked partly to the council’s good record of housing delivery”.

In terms of housing conditions, eThekwini again performs well. Only about two percent of households in the metro do not have access to toilet facilities, upwards of 90 percent benefit from refuse removal, more than 80 percent have access to piped water and about 92 percent have electricity.

Water: South Africa is facing the very real threat of water shortages, especially eThekwini and Msunduzi. Residents of the two main KZN towns are the joint fifth-highest water users in the country, with each person using an average of about 260 litres a day.  Joburg residents use the most (nearly 400 litres a person a day), followed by Bloemfontein (350 litres), Pretoria (330 litres) and Ekurhuleni (320 litres). East London residents use the least, about 90 litres a day.

But the two KZN municipalities are among the highest when it comes to unaccounted for water. In eThekwini, more than 35 percent is unaccounted for and the figure is not much less in Msunduzi. Joburg loses about 40 percent.

Credit rating: The eThekwini Municipality has the joint-best credit rating of the country’s main cities. With an AA-rating the same as Cape Town and Ekurhuleni – the city can get the best possible interest rates on loans. Nelson Mandela Bay has a credit rating of A+, Joburg an A and Tshwane a BBB+.

Service Delivery Protests: There have been more service delivery protests in Joburg than anywhere in the country since 2004, with eThekwini the least. Protests rose sharply in 2009 and 2010, just after the national and provincial election. Most were in informal settlements. There have been about 45 major service delivery protests in Joburg since 2004, about 34 in Cape Town, 23 in Ekurhuleni, 17 in Nelson Mandela Bay, and 11 in eThekwini.

SALARIES, WATER, ELECTRICITY DRAIN MUNICIPALITIES

South African municipalities are in a worse financial state than they were five years ago – and it looks set to worsen.

This is according to Yasmin Coovadia, CEO of Public Services and Utilities International, speaking at the launch of the State of the Cities 2011 report in Joburg this week. Presenting the chapter on municipal finances, Coovadia said progress had been made until 2007, but then worrying factors began to emerge, including an increase in the number of grants from national government, a rising wage bill and ballooning bulk services costs, such as water and electricity.

“South African cities were generally weaker in 2009 than they were in 2006. Based on the audited 2009/10 financial statements – and we are busy updating our figures – we are probably going to see an even bleaker picture, because we will see more clearly the full impact of the recession on municipalities,” Coovadia said.

On average, the six metros have about six weeks’ cash on hand in their bank accounts. This means if they received no income they could operate for only a month and a half.

eThekwini deputy city manager Sipho Cele said the city’s cash on hand was down to about 25 days, but after legal action against government departments, there was now more than 60 days’ cash on hand in the city’s account.

Despite these problems, the cities were praised for increasing their capital spending, which ensures that services are delivered to the citizens.

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