A study by one of the world’s leading academic publishers highlights the pressing need for local government reform in South Africa, focusing on the detrimental effects of poor governance, financial mismanagement, and failing infrastructure in the country’s metropolitan areas on economic growth.
Taylor & Francis, known for its publications in social sciences, science, technology, engineering, and medicine, featured a research note by Ivan Turok and Justin Visagie.
They pointed out that while cities should be the engines of employment and economic activity, many are instead hindering national growth.
The researchers identified a “striking concentration” of employment in urban areas, noting the quantity and nature of these jobs.
“The metros have a more favourable and diverse economic structure than towns and rural areas. However, most have performed poorly over the past decade, thereby dragging down the national economy.”
Business Leadership South Africa (BLSA) CEO Busi Mavuso recently stated that despite being South Africa’s economic powerhouse, Gauteng’s decline in job numbers, the slow disintegration of its largest metros, and persistent political dysfunction are undermining the country’s overall progress.
Mavuso said that the province has acted as a major hindrance to the nation’s economic growth, pointing out the significant deterioration in Gauteng’s major metropolitan areas, with political instability and dysfunction stalling economic performance.
Given that the province accounts for a third of South Africa’s GDP, this has a ripple effect on the national economy.
“Political dysfunction has a real cost in economic performance,” Mavuso said. “So, while the GNU is delivering improved confidence nationally, the experience of much of Gauteng remains negative.”
Turok and Visagie called for further research into spatial inequalities and labour market dynamics, emphasizing that the deteriorating governance in metros requires urgent attention from national authorities due to their critical role in the economy.
“Most of the metros have performed poorly over the last decade. It is difficult to imagine the national economy prospering as long as the main cities struggle and stagnate,” they stated.
The findings underscore the dysfunction and mismanagement plaguing South Africa’s metropolitan areas, which house key industries such as food and beverage production, chemicals, and pharmaceuticals.
These areas are grappling with crises in energy, water, transport, and logistics, along with widespread financial mismanagement.
This study is released as South Africa prepares to place greater focus on the performance of its metros and municipalities through the government’s Operation Vulindlela 2.0 initiative.
The programme, launched by president Cyril Ramaphosa’s office and the Treasury in 2020, aims to expedite reforms.
The research also highlights the alarming level of debt municipalities have accumulated with Eskom, now totalling R109.4 billion—an 18-fold increase from the R5 billion owed in 2015—jeopardising efforts to stabilize the national power utility.
Turok and Visagie argue that it is unfair to expect metros to adequately support incoming populations without substantial state backing for public infrastructure and essential services.
Their study found that the five largest metros—Johannesburg, Cape Town, Tshwane, eThekwini, and Ekurhuleni—account for nearly 60% of the nation’s formal employment.
However, the researchers cautioned, “One could argue that this map does not adequately capture the economic significance of the metros because they cover such a small proportion of the country’s territory.”
They also warned that overemphasis on this map could result in metros receiving insufficient attention from decision-makers. “Repeated use of this kind of map over many years could perhaps contribute to the metros receiving less attention than they deserve—or require to realise their potential.”
The study further revealed that none of the metros saw significant employment growth in manufacturing or other tradable goods. In fact, the Gauteng metros experienced job losses in manufacturing.
In Cape Town, the majority of employment growth came from retail and wholesale services, followed by administrative sectors such as call centres, labour brokers, and security services, as well as finance and insurance.