Why the DA Rules in Midvaal

LOCAL ECONOMIC DEVELOPMENT AND THE MIDVAAL MODEL
By Tim Nast and Gavin Lewis.
We are not doing the right things to make Gauteng grow to its full potential. Yet much of what is so urgently needed is not complicated, does not require costly five year plans, or even much more money. Nowhere is this more apparent than in the sphere of local; government.
Local economic development (LED) lies at the heart of the effective functioning of the local government sphere. Without the additional resources that arise from LED there is little room for local development. In turn this undermines the sustainability of a healthy, developmental sphere of government, whose success or failure most immediately affects the lives of ordinary South African.
The problem we currently face, and which helps account for the epidemic of local government breakdowns across South Africa, is the bald fact that LED is failing disastrously.
The reasons for this failure are not hard to find. They include the creation of unrealistic expectations about what LED can provide, a preference for quick wins that forgo sustainability in favour of one off distributions of goods and materials to a favoured few in a favoured location. It results in projects ( from bead-making and other crafts to hydroponics experiments) that peter out after a few months. It creates the idea that ward councillors are dispensers of patronage and jobs (albeit temporary) for those in the community that support them. And it creates a "quick fix" mentality that is at odds with the longer term vision that underlies sustainability.
This is why we have Multi-Purpose Centres that often stand largely unused.. This is why farming coops are set up without any thought as to who will buy those products, and at what price. After a few months the taps are stolen, as are the wheelbarrows and spades. This provides (very expensively) a one off cash boost to those that appropriate it - but no sustainable development. The day the government turns off the spigot, the project collapses.
Experience shows that real LED, by contrast, only occurs in South Africa when it is private sector driven. The truth is that government cannot create "decent" jobs, as government itself concedes. The Expanded Public Works Programme is not a sustainable development initiative leading to decent jobs. It is a charitable handout. EPWP (or its variants) have a role to play. But they must be understood for what they are .
This is not to say that there is no role for government in LED. LED has an essential part to play in local government, if this important sphere of delivery directly to the citizens is to be sustainable at all. The fact that so many local authorities are in a crisis because they are not sustainable under current constraints should bring no comfort to anyone. And since LED is not something that automatically happens in isolation, clearly there must be ways of using local resources to extract maximum local benefit.
What then can be done?
The experience of the Midvaal municipality, the only one in Gauteng province governed by the DA, contains some constructive practical examples of both the limits and the real possibilities of LED. In brief, there are three Commandments : 1.Get the basics right and working. 2. Slash all unnecessary expenditures on "nice to haves". 3.Keep your town neat and tidy and safe.
Expanding on this, In Midvaal local government sees its role in LED as the following;
1. Efficient service delivery, driven by capable employees.
2. Recirculating the local rand spend locally as far as is sensible, by requiring municipal contractors to purchase from local suppliers and use local labour,(bearing in mind cost constraints).
3. Build into performance management targets for municipal staff requirements for the employment of local low and unskilled local labour wherever feasible.
4. Procure locally where possible (e.g. plumbing supplies, electrical goods).
5. Require banks that wish to do business with the municipality to have at least a branch (not just an ATM) in that municipality, employing people that spend locally and making for business convenience.
6. Outsource non-essential services to local private sector SMMEs and coops (e.g. laundry, catering).
7. Keep the town a place where people – and investors- want to live in it and raise their families there.

What local government cannot promise is to create sustainable ""decent work ". For the rest, it is as simple, and as difficult, as getting the basics right.
Things such as water and electricity supply are also important, but much of this is beyond the control of a single municipality, falling to the Province instead. Province wide to maintain and extend infrastructure shifts extra uncosted burdens onto municipalities that do their maintenance, so that (for example) sewerage gets diverted from other areas less well governed, overstraining the few functioning systems. In Gauteng the provincial authorities are in a permanent cash flow crisis, and late payments destroy struggling SMME start-ups, and undermine municipal viability when running larger capital projects. All these constraints inhibit further development in the sub region, because new projects require services that are either collapsing or nonexistent – such as sewerage. And at the local government level, the small things that do make a difference – [proper signage for tourists, traffic lights that work, regularly resurfaced roads, electricity substations that do not constantly teeter on the verge of explosion, replacing transformers that have long passed their sell buy date, leading to regular blackouts and shutdowns) – all are neglected in favour on non essential "nice-to-haves", such as marketing and tourism promotion , overseas travel, and national pavilions.
As a direct result, starting with LED at the bottom, every years the Gauteng Provincial government's own statistics show that this province, still the" engine of Africa" in our promotional brochures, is steadily falling behind the growth rates of provinces such as the Western Cape. At current rates, in a few years it will be Lagos, not Johannesburg, which will be the economic engine of Africa, followed closely by Cairo. The "engine of Africa" boast will go the same way the claim ( until recently ) that we had "the cheapest electricity in the world".
As for investment, it is the quality of local government services can in fact make all the difference. In 2009-2010 one of the biggest foreign investments attracted to South Africa was the new, greenfields Heineken factory. A R 3.5 billion investment, it is now creating 2 500 construction jobs, 220 permanent direct jobs, and over 200 local indirect jobs ( all "decent jobs") , Heineken had a choice of locating next to a major Metro, or Midvaal. They chose Midvaal. Why?

1. The Midvaal executive made themselves available to the Heineken executive on their private lines 24/7 to deal immediately with any problems that arose. The Metro did not.
2. The (multi-party) Midvaal Council was prepared to delegate to the mayoral committee to meet at 24 hours notice at any place convenient to Heineken to resolve urgent concerns. The Metro was not.
3. Midvaal made sure that all the nitty gritty issues, such as rezoning, were speedily addressed and resolved to deadline, working the system to achieve the outcomes needed, and not simply referring people back to "the rules. For Midvaal, the priority was the investment, not the convenience of municipal officials or the sanctity of the rule book and a 9-5 working day.
4. For Heineken, all they needed from Midvaal in terms of investment support (on which the Gauteng province otherwise spends millions) was accurate data suited to their businesses needs, as defined by themselves.
5. Heineken now has a direct line to the Major and the Municipal Manager.
6. Midvaal was able to make decisions quickly. The Metro demanded three months notice, and could in any case be overruled by the provincial ANC leadership. Midvaal, admittedly a smaller municipality, needs 24 hours. Midvaal deals with rezoning applications within 6 months. The Metro takes up to three years.
In return for this no frills common sense approach. Midvaal was rewarded with nearly 3000 decent sustainable jobs. This is a LED success story, creating a better life for all its citizens.
As a result, when the Gauteng City Region Observatory recently produced a quality of life survey of all Gauteng municipalities, it showed, amidst considerable publicity, that Midvaal was the only municipality in the entire Province where the majority of the inhabitants, black and white South Africans together, were happy with the standard of local government services. It is not rocket science.

( Tim Nast is DA Mayor of Midvaal. Gavin Lewis is a DA MPL and a development analyst.)
( Note; This article first appeared in Business Day, 22/7/10. The DA retained Midvaal in the 2011 elections).