Funding rural development in South African municipalities

Makgamatho, Kedibone Grace (2012-12)

Thesis (MDF)--Stellenbosch University, 2012.


The main purpose of this research paper is to reveal the importance of rural development with the aim of making municipalities the main drivers of rural development - this in an effort to stimulate and increase economic participation for rural people. The study seeks to understand the intervention by municipalities in accelerating rural development, how municipalities are currently implementing and funding development programmes to improve the lives of rural people. Rural development has been a key strategy to develop the lives of rural people in many countries around the globe. The concept has somewhat been paired in other countries with the achievement of Millennium Development Goals (MDGs). In the new South Africa, the rural development concept has been revived through the Reconstruction and Development Programme (RDP), which intended to eliminate the inequality that was brought by the apartheid system. Many other programmes of development or rather, rural development, were introduced to bridge the gap between the poverty-stricken areas/individual and those who have access to resources for the betterment of their lives. The signs of poverty are, however, still visible in many parts of South Africa, with insignificant signs of improved lives, mostly for rural areas, regardless of the programmes that have been initiated by government since the democratic elections took place in 1994. Thus, the effectiveness of rural development policies and implementation of associated programmes are still questionable. Municipalities are mandated to implement the rural development programmes by default, as they are closer to beneficiaries and communities on the ground. Thus, enabling municipalities to steer these development programmes is a good bottom-up approach to development as opposed to national level undertaking to implement these programmes from the top. However, municipalities have also proved to have their challenges, including challenges of sourcing funding, which then make the drive and implementation of these development ideas difficult to carry out. The study reveals that funding of rural services or anything that is rural in nature, has become very difficult. Thus, this study investigated how municipalities strive to raise funding for rural development in an effort to improve rural people’s lives. The related factor that has been investigated is the capabilities and capacity of municipalities to implement the development programmes. The study also explored the current development situation on how municipalities have been able to carry out the development mandates and what has been the impact of rural development programmes/policies since they have been developed to breach the gap of inequality in the country. Indication by municipalities is that most of their funding is from the government through the Municipal Infrastructure Grants (MIG) and Equitable Share. However, this funding does not necessarily encompass funding for rural development programmes but rather is for normal capital expenditure, operational expenditure to enable basic service delivery projects, such as water and electricity. The results have indicated that rural development projects are not specifically or necessarily budgeted for, but they are dealt with on a case-by-case basis or as and when rural development ideas are thought of. Regarding the institutional capacity of municipalities, most of the municipalities within the sample (72%) indicated that there is lack of adequate and skilled labour to address the challenges and priorities of rural development. The above challenges have led to municipalities realising a minimal impact for rural development and the inability to prove and point out in any way, the improvement of rural people’s lives. Perhaps some of this depends on how municipalities and communities understand rural development. The study revealed that most municipalities understand rural development as improvement of rural people’s lives and understood rural development as the provision of rural services and infrastructure. This thought is correct regarding rural development, however, the challenges of minimal impact experienced by municipalities could be linked to the limited funding that is being provided for rural development. The consensus is that funding of rural development has been minimal and there has to be more interaction to ensure it is as a priority like other programmes planned and budgeted for by government. There is a need for municipalities to be properly capacitated with skills and technical assistance to take forward the rural development mandate. In the process, municipalities should be able to allocate funds provided either by government or by private sector institutions to avoid rural development projects being funded by chance. To reduce the poverty lines that are visible in most rural areas, rural communities also need to be given training to allow them the mobility to grow those rural development programmes being introduced by government and municipalities, thus sustaining their lives in the long term. Collaboration is of importance, thus different stakeholders should be involved to assist municipalities in accelerating the rural development agenda.

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