Countries prosper when cities work – we must fix ours, especially the powerhouse, Joburg

6 July 2023

The most crucial step towards fixing our cities is better governance. The consequences of corrupt and dysfunctional government are evident everywhere, including in the country’s largest and economically most important city, Johannesburg.

Metros are the country’s job generators… Strong urban centres are necessary for productive rural hinterlands,” Minister of Finance Enoch Godongwana said two weeks ago.

Throughout history, cities across the globe have been at the heart of social, cultural, political and, especially, economic progress. South Africa’s cities are the places where it could become possible to find opportunity for the poor and create prosperity for the many.

If they are to become cities of hope, however, we will need significant changes to how we think about our urban areas and how we govern them.

The minister was speaking at the launch of a new programme to provide metros with more complete economic data – a welcome development. Information on cities’ socioeconomic performance is not as comprehensive and reliable as it should be. This has important implications for cities’ ability to identify priorities and track progress.

Better data is only one element of a suite of policy interventions required to stop the decline of our cities, ensure appropriate incentives for faster growth, build capacity in urban government, and, by extension, begin the process of fixing our national economy.

As history has shown, countries prosper when cities work.

The most crucial step towards fixing our cities is better governance. The consequences of corrupt and dysfunctional government are evident everywhere, including in the country’s largest and economically most important city, Johannesburg.

Since the 2021 election there have been five changes to the Johannesburg mayoralty, with the incumbent (who represents a 1% party) at risk of being expelled for allegedly running a Ponzi scheme.

The lack of governance can be seen in the volume of street crime, in collapsing city finances and decaying infrastructure. Across all spheres, failure has been normalised.

Far too many officials in our cities lack the skills, experience, competence and integrity to fulfil their functions.

Among the eight metros only Cape Town and Ekurhuleni received clean audits in the latest Auditor-General report. Combine that with a level of volatility in local governing coalitions that has reached farcical proportions, and it is clear that misgovernance is driving a collapse in cities’ administrative and operational performance.

More to be done

Besides stabilising the governance of our cities, a number of other things need to change – urgently – if our cities are to be the engines that drive economic growth, opportunity and prosperity.

We need to tackle the challenge of apartheid’s urban spatial legacy. The structure of our cities reflects a heritage of segregated land use and denial of economic opportunity that continues to obstruct their capacity to generate and sustain rapid economic growth.

Post-apartheid housing policy has deepened and extended this highly inefficient approach to urban settlement – with many new areas of remote “RDP” housing far from all the opportunities of urban agglomeration. There are no quick fixes for this but we must stop the reproduction of isolated settlements of poor people through housing policy. We have to promote much greater densification in our existing metros, cities and towns.

That said, densification is already happening in the core of some cities and their surrounding inner suburbs where buildings are being renovated or refurbished for residential use, and family homes are being repurposed into multipeople dwellings. In addition, new buildings (often three- to four-storey walk-ups) are being built in backyards and open lots.

These are positive developments driven by small businesses, many of them black-owned and managed, which represent a viable alternative to existing housing policy.

For these in-fill developments of different kinds to work, public money should be redirected to strengthen metro governments. They need to provide and maintain urban infrastructure, especially in inner cities and inner suburbs, and increase their capacity to enforce basic minimum standards for health and safety as essential measures to ensure these places remain and become viable places to live.

One of the challenges cities face in promoting densification is that the process of approving development projects is complex, frequently slow or delayed by long consultation procedures, and subject to numerous points of potential veto by all kinds of stakeholders. All of this adds cost and risk to projects.

Metro governments need to strengthen their urban management capacity so that they can respond to requests from developers quickly, approve building plans and conduct inspections efficiently.

At the same time, much more attention needs to be given to ensuring that building regulations do not impose standards and requirements on residential development that raise costs unduly and make formal housing unaffordable to most urban residents.

While some of the processes that must be followed before projects break ground are inevitable and even desirable, cities do not deploy enough political capital to push projects through the process more rapidly. Some of these projects become hostage to various interest groups, not the least of which are residents who would prefer development to happen anywhere in the city except near to them – the so-called “Nimbys”. Cities need to become more active in pushing projects and proposals through these processes.

State-owned entities and national departments own a lot of urban land, often underutilised or unused. This is an important resource for densifying cities and creating new opportunities for growth and inclusion. State entities need to account for their urban land and should have to explain publicly why such land cannot be released for urban development.

Cities, too, need to become more active in releasing publicly owned land for development. This step – critical for in-fill development – is a significant blockage in the development process and it is largely in the hands of public agencies to resolve.

To achieve faster growth, metro governments need to allow the power and efficiency of enterprises operating in competitive markets to drive their economies. There are many challenges to doing this, but one is that too many city governments do not know or fully appreciate what business needs if it is to prosper.

That deficiency can be partly rectified by talking to organised business in their city. By focusing on the needs of business, a better environment for growth will emerge, workable public-private partnerships can be established and investments in infrastructure are more likely to yield economic returns.

Cities need more space to pursue the policies necessary for stimulating economic growth and enhancing efficiency. For example, cities cannot effectively plan and deliver integrated public transport if they do not have authority over commuter rail. Nor can they attract growth and investment if they have no ability to keep their residents and businesses safe.

The devolution of key functions – such as passenger rail and policing – should be firmly on the agenda of every city mayor. In general, city leaders need a far greater “voice”. They should be playing a more prominent role in national debates around issues that affect their ability to create the best environment possible for economic growth, employment and inclusion.

In a country that is increasingly urbanised, cities play much more central roles in our economy and society. They must be governed by credible and legitimate political leaders.

We need to find ways to encourage prominent and experienced citizens to participate in metro governments. Managing and leading South Africa’s metros should not be the political landing space for those who cannot make it in national politics.

This article is based on a new CDE report, “SA’s future will be decided in our cities”. The specially commissioned research was supported by Economic Research Southern Africa

Article published by the Daily Maverick