Boosting infrastructure: Godongwana's new grant system for South African metros
Minister of Finance Enoch Godongwana has called on South Africa’s metros to urgently reform how they manage essential services
Image: Parliament of SA
Minister of Finance Enoch Godongwana has called on South Africa’s metros to urgently reform how they manage essential services like water, electricity, and sanitation.
Godongwana said this during an engagement session with executive mayors on Monday, where he outlined the government’s new incentive-based grant system aimed at improving service delivery and infrastructure investment in metropolitan areas.
The minister also noted that during the past four decades, underinvestment in these key services has weakened cities’ ability to support economic growth and connect more households and businesses to reliable infrastructure.
"As the national government, we have looked at this challenge, and instead of pointing fingers at metros, we have decided to take some steps to address the decline and underinvestment," Godongwana said.
"This is through the conceptualisation and formulation of the Metro Trading Services Reform and the restructuring of the grant system by including a performance incentive. Our approach is to work with you in a complementary way by creating an incentive-based grant for the trading services. This will create accountability and predictability in grant allocation to metros and the national government, respectively".
According to the minister, the reform is designed to encourage metros to invest more of their own resources through borrowing and internally generated funds into critical infrastructure.
"Our vision is to use the incentive to ignite investment in metros — your areas of jurisdiction. Our expectation is that through this incentive, your respective metros will invest additional money in this targeted infrastructure through borrowing and internally generated funds".
The minister added that the reform aims to create greater accountability by linking grant funding to performance.
"The metro trading services is one area where you can immediately learn together and collaborate. If we work collectively towards implementing this reform the way we have designed it, it will not only unlock the economy, but it will also improve your financial position and economies"
IOL Business
mthobisi.nozulela@iol.co.za