KHANYA – AICDD

AFRICAN INSTITUTE FOR COMMUNITY – DRIVEN DEVELOPMENT

The Secretary

Portfolio Committee: Provincial and Local Government

5 September 2007

Attention: Llewelyn Brown.

Dear Sir

Submission: Proposed clause to the Local Government Amendment Bill about Funding Communities

Introduction

In 2006 Khanya-aicdd together with Practical Action Zimbabwe and Concern Malawi undertook research project to specifically look at best practice in funding of communities.

The intention of the research was to learn from the existing experiences on how such approaches could be taken forward in Africa. The findings of the research have key implications for policy in South Africa about funding communities.

A workshop was held on 27th-28th August 2007 at the Ekhurhuleni Council Chambers to discuss models of funding communities further. After consultation with key practitioners from government, private and civil society sectors, this submission, emanating from within Khanya-aicdd and improved upon during consultation, motivates for and proposes a clause to the Local Government Amendment Bill about Funding Communities.

Motivation

Decentralisation and participatory approaches are now mainstream in development. Khanya-aicdd has been using such approaches as part of a community-driven development (CDD) approach. Key to CDD is funding communities to take forward their own development and a wide range of approaches have been used in across the continent including:

· Social Investment Funds, eg ZamSIF in Zambia and Malawi Social Action Fund (MASAF) in Malawi

· Funding of community plans, eg community-based planning in South Africa

· Communities retaining local revenue generation, eg CAMPFIRE in Zimbabwe, or the Graduated Tax in Uganda

· Cash transfer systems, eg Kalomo Project in Zambia

· The use of Community Trusts or Foundations, eg Greater Rustenberg Community Foundation (GRCF).

The above mechanisms show that such funds have been well spent and have had a major impact and can be an effective weapon to address poverty and inequality. In this regard similar schemes and mechanisms should be encouraged and seen as important weapons to address development within specific regions.

The closest form of government to the people, local government co-ordinates and lessens the complexities of funding from donors, taxes and the private sector. In South Africa the Integrated Development Plan is supposed to be informed by community needs and the appropriate budgeting is allocated by the state to meet these needs. The voice of the people, through participation and association, enhances government responsiveness to local development. South Africa’s Municipal Systems Act provides for communities to participate in

the affairs of local government. Therefore decentralisation can elevate the position of communities to make their choices about their own development.

The selection of appropriate funding mechanisms should be related to the needs of the local community as well as its environmental potential. If the primary challenge to development is simply an inability of local communities to access funds, some form of government or semi-government structure to provide loans and/or grants to marginalised communities may go a long way to stimulating development.

Proposed Clause

It is within this context that we propose that the following clause be added to the Local Government Amendment Bill:

In order to promote active involvement of communities in development, municipalities should make allocations of at least 2% of the municipal budget to ward committees or any project committee appointed by the ward committee as discretionary ward funds for community economic and social development, subject to a ward plan being developed which has broad public ownership, and which is linked to the IDP. These funds should be implemented by the ward or any of its project sub-committees and are the responsibility of the ward committee. The ward committee will be accountable for implementation and funds spent to the population of the ward and the municipality, and the municipal manager would be accountable to ward committees.

Rashnee Parhanse

LED Practice Manager

5 September 2007