South Africa’s nine provinces increasingly seem to be more of a liability than an asset

The Covid-19 crisis continues to wreak havoc across the globe, and our country is not spared. The pandemic broke out in South Africa at a time when the country was already under pressure to respond to a challenging economic environment in which global growth was slowing and trade tensions between the United States and China were having a debilitating impact on the global economy. 

During the third and fourth quarters of 2019, South Africa was already experiencing declining growth rates and high job losses, adding further complications to the increasing public debt burden, underperforming tax revenues as well as general structural economic weaknesses that constrained the country’s ability to respond to national imperatives and global realities. 

Emerging consensus now is that recovery from the Covid-19 pandemic will be more difficult than the period immediately following the 2008 global financial crisis, as the World Health Organisation (WHO) and other multilateral bodies posit that the pandemic is the worst health and economic crisis since World War II, disrupting health and livelihoods and unleashing a wave of uncertainty.

In South Africa, the pandemic has reignited debates about the appropriate policy mix to enhance state capacity and effectiveness, address structural economic inefficiencies and set the country on a long-term growth and development trajectory. 

Some leading political figures, both within and outside government, and commentators – somewhat echoing the global ratings agencies’ views – have been remonstrating about South Africa’s misaligned and inefficient state and poorly performing state-owned enterprises like Eskom, SAA and Denel,  many of which have become a drag on the fiscus.  

From this perspective, state capacity needs urgent re-engineering to determine, implement and strengthen policy certainty. Additional structural reforms aimed at improving the effectiveness of public spending and rebuilding of public institutions will bolster business confidence, encourage private sector investment and lead to higher levels of economic activity and, hence, growth.

An important element that is missing in the current debate about national reforms, although it was sharply raised by political parties a few years ago, relates to the structure and efficacy of the country’s intergovernmental system. The question is whether, 26 years into democracy, provinces, in their current number and configuration, have a discernible value in promoting state effectiveness. The intergovernmental system, comprising three spheres (national, provincial and local government), is the product of a negotiated settlement at the Convention for a Democratic South Africa (CODESA), that ultimately found expression in Chapter 3 of the Constitution under the principle of co-operative governance. 

In the recent past, there have been concerns, from political parties and across civil society, that the rationale for the existence of the three spheres of government is no longer relevant; with parties such as the African People’s Convention (APC) suggesting that provinces have become nests of corruption, that they are an unnecessary drain on the fiscus and a hindrance to service delivery and development. For the Economic Freedom Fighters (EFF), the provincial borders reinforce the country’s ethnic and tribal make-up.

While the ruling African National Congress (ANC) advanced an argument that reducing the number of provinces would address concerns over the concentration of resources and improve service delivery, the Democratic Alliance (DA) and Free Market Foundation defended the provinces, stating the obvious – that these were founded on the constitutional principle of co-operative governance. The foundation expressed a concern that tampering with provinces would create uncertainty and disrupt the rule of law in the country. But, apart from the obvious import of this argument that the Constitution should not be amended willy-nilly, what is the continued relevance of the current architecture of provinces? 

There has been an erosion of capacity and a weakening of institutional integrity. Although the national government has historically invoked Section 100 interventions in provinces where systems ground to a halt – such as in the Eastern Cape, KwaZulu-Natal, Limpopo, the Free State and the North West – governance and internal financial controls in provinces continue to exhibit weaknesses, and these jeopardise service delivery.