Evaluating the Impact of Informal Settlements on Municipal Revenue: Saldanha Bay Municipality
Date
2024-12
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Stellenbosch : Stellenbosch University
Abstract
This research evaluated the potential contribution of the informal settlement residents to the revenue of the Saldanha Bay Municipality. Municipalities are required to provide the free basic services in terms of Sections 214(2)(d) and 227(1)(a) of the Constitution (South Africa, 1996). However, the financing of free basic services places a burden to the municipalities since funding from own revenue means cross subsidisation. The relevant theory reveals the need for incorporation of informality into the broader urban fabric to create sustainable urban development and resilient cities. The guidelines and standard provide the level of services which must be provided in informal settlements. The area of study are the informal settlements within the jurisdiction of Saldanha Bay Municipality. The settlements which were studied are Tsitsiratsitsi 1, 2 and 3 in Vredenburg and Joe Slovo/Marikana in Saldanha, with a total of 3 596 households. The municipality collects and maintains data with respect to the levels of water, sanitation and solid waste services provided to the informal settlements. The municipality also conducted a structured survey in 2022, which provided an important dataset for the relevant analysis in this study. The budgetary expenditure on equitable share for the period of 2018/19 to 2023/24 was used to evaluate the affordability for the upgrading. The findings reveal a shortfall in the provision of interim services for water, sanitation and solid waste, resulting into financial savings on equitable share allocation. Furthermore, the socio-economic indicators of residents within the informal settlements indicates that most of the households would qualify for indigent subsidy, in terms of the policy of the municipality. Potential loss to the municipal revenue arising from the delayed upgrading would be meagre considering the socio-economic indicators of households within these settlements. The rising cost for implementing the upgrading programme would result in future financial loss for the municipality. The generated savings from the equitable share would yield sufficient savings for the potential upgrade of 2 780 or 77% of informal settlement households. It is recommended that the incremental upgrading should be prioritised to meet the set standards and guidelines for interim services.
Description
Thesis (MPhil)--Stellenbosch University, 2024.