Financing the Post-apartheid City in South Africa

Abstract

The recent dramatic changes in South Africa have created new opportunities for altering the country's basic political and economic institutions. Whilst much attention has been focused on the national level, another crucial strand in the reform movement has been efforts to foster truly effective non-racial local self-government which in turn need adequate own-source revenues. With the predicted increase in the urban black populations, the Black Local Authorities, which are supposed to be financially self-sufficient, will come under increasing pressure. A discriminatory electricity price system and boycotts in response to rapidly rising rents further reduce BLA income. Increasingly, BLAs are coming to rely upon user fees and charges to provide services, but unless the fee structures are carefully designed they become regressive. What is required is a single-tax-base including the local property tax and a local income or value-added tax.