South African metros face funding struggles - Economist
An economist warns that South African metros
will continue to struggle with the current government funding model and lack of
investments.
A study recently revealed the country's metros have performed poorly economically in the last decade.
Researchers found that infrastructure neglect, lack of investment in water and sanitation systems, and electricity played a major role in the economic performance.
Independent economist Duma Gqubule agrees with researchers, saying municipalities can't keep up with maintenance due to how they are funded.
"When the funding models came out in the late 90's, there was assumption that metro could self-finance up to 90% of their banking requirements. What is happening now, I think now the government grants of about 27%, but it's still inadequate for metros to find themselves."
READ: SA metros see economic slide – report
Gqubule believes some metros are still recovering from the COVID-19 pandemic and their debts have gone up and will take a while to recover.
"Towns and cities throughout the country are falling apart and they need a huge injection of capital. We have a regular water cut, regular electricity cuts,” he said.
“So, if we focus on investments in our people, to our infrastructure, we will get our economy to grow again. If we build water infrastructure, and electricity distribution, our cities will be better again."
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