SOUTH AFRICA: HOUSING AND SERVICE DELIVERY WOES

UNCLAS SECTION 01 OF 03 PRETORIA 000347

SIPDIS

SENSITIVE
SIPDIS

STATE PLEASE PASS TO DEPT OF HUD

E.O. 12958: N/A
TAGS: PGOV ECON EFIN EINV EAID SF
SUBJECT: SOUTH AFRICA: HOUSING AND SERVICE DELIVERY WOES
PERSIST IN FACE OF LOCAL ELECTIONS

REF: A. 05 PRETORIA 4585 (NOTAL)

B. 05 PRETORIA 4966 (NOTAL)

C. 05 PRETORIA 5010 (NOTAL)

D. 05 PRETORIA 5032 (NOTAL)

E. 06 PRETORIA 23 (NOTAL)

F. 06 DURBAN 5 (NOTAL)

G. 05 PRETORIA 2621 (NOTAL)

H. 05 DURBAN 136 (NOTAL)

(U) This cable is Sensitive But Unclassified. Not for
Internet Distribution.


1. (SBU) Summary. Since mid-2004, South Africa has seen
several protests in disadvantaged communities, ostensibly
against poor public service delivery, lack of adequate
housing, and corruption. These protests have intensified in
the run up to the March 1 local elections, suggesting that
there are distinct political overtones behind the unrest.
While the government has made progress on housing and
delivering public services to poor South Africans since 1994,
millions of residents still live without access to basic
shelter, clean water, sanitation services, or electricity.
The focus of their frustration has increasingly been on the
inability of local government to serve them. Most municipal
governments are under skilled and under staffed, and many are
poorly directed. President Mbeki is focused on rooting out
ineffective municipal leaders and building local capacity.
The Departments of Housing and of Provincial and Local
Government are working with municipal governments to remedy
the situation, but the task is daunting. The immediate
question is whether South Africans will recognize the
government's effort and turnout at the polls on March 1. End
Summary.


2. (SBU) This cable is part of a series of cables reporting
on the lack of public service delivery and the mood of the
electorate in advance of local elections on March 1. Team
members, including Embassy, Consulate, and USAID personnel,
will visit a diverse, but representative sample of
municipalities in all nine provinces to better understand the
extent of the problem. Ref A served as a background piece on
local elections. Refs B through F detailed visits to the
Eastern Cape, North West, and KwaZulu-Natal Provinces.
Municipalities in the other provinces will be covered in
subsequent cables. This cable provides an overview of local
government service and housing delivery issues.

Local Unrest Unabated
--------------


3. (SBU) Disgruntled residents continue to protest against
local governments throughout the country, as they see little
improvement in their daily lives. These protests have
recently intensified in part due to local politics heating up
in the face of the March 1 local elections. Since July 2004,
protests have sprung up in pockets across South Africa as
residents, fed up with corrupt municipal government,
inadequate housing, as well as a lack of access to clean
water and sanitation take their frustrations to the streets
(Ref G). During the past six months, protests, mostly
involving burning tires and blocking roads, have occurred in
Soshanguve (Pretoria/Gauteng),Mabopane (Pretoria North/North
West),Frankfort (Free State),Walmer (Port Elizabeth/Eastern
Cape),and Worcester (Western Cape) as well as in other
areas.

How Bad Is It?
--------------


4. (U) Eleven years after the transition to democracy, the
government can claim limited success in rolling out housing
and public services to the ANC's core constituency, i.e.,
those that apartheid sought to ignore. Nevertheless, housing
and the provisions of basic public services to this sector of
the population remain quite low. Although the SAG has built
1.8 million low-income homes since 1994, the backlog of homes
remains roughly the same, i.e., 2.4 million units. According
to the South African Government (SAG),63% of households in
2004 had access to adequate sanitation, 70% of households had
access to electricity, and 90% had access to clean water.
However, the quality of access varied greatly. Access could
include everything from indoor plumbing to a shared community
tap. The statistics do not distinguish between the quality

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of access.


5. (U) A June 2005 study by the University of Cape Town,
claimed that access to public services and housing had
slightly improved over time, most notably in the provision of
electricity. The study, entitled "Measuring Recent Changes
in South African Inequality and Poverty using 1996 and 2001
Census Data," reported on access to public services and
housing for the poorest 20% of the country as well as for the
population as a whole. Access to public services and housing
for the population as a whole was as follows:

Service 1996 2001
-------------- -------------- --------------
Piped Water 80% 82%
Electricity for Lighting 58% 70%
Formal Dwellings 65% 68%
Refuse Removal 51% 54%
Sanitation 50% 53%
Electricity for Cooking 47% 51%

Access to public services and housing for the poorest 20% of
the population was as follows:

Service 1996 2001
-------------- -------------- --------------
Piped Water 65% 72%
Electricity for Lighting 35% 57%
Formal Dwellings 49% 57%
Refuse Removal 27% 33%
Sanitation 21% 29%
Electricity for Cooking 19% 27%


6. (U) While national statistics revealed little improvement
in access to public services and housing (except for the
provision of electricity for lighting),the poor did
experience a marked increase in nearly all categories. At
the same time, a substantial percentage of the poor
population remained unserved, particularly in the Eastern
Cape and Limpopo Provinces. Meanwhile, Western Cape and
Gauteng Provinces experienced percentage declines in public
service and housing delivery as a result of rapid migration
of rural poor South Africans in search of work in growing
urban areas.

The Source of the Problem
--------------


7. (SBU) Municipalities suffer a range of problems, but most
boil down to a lack of capacity. After a 2004 assessment of
the country's 284 municipalities, the Department of
Provincial and Local Government (DPLG) announced that 136, or
nearly half, of them were "under-performing" (Ref G). Eighty
municipalities did not have technically skilled staff, and
more than forty employed only one person with technical
skills. Only seventy municipalities had a qualified civil
engineer, despite the fact that they are charged with
supplying such public services as water and electricity to
local residents. Nearly half of all municipalities failed to
submit financial reports to the Auditor-General in accordance
with the Municipal Financial Management Act (MFMA). Those
that did often took four to six months to file, instead of
the allotted two months.


8. (SBU) Extremely weak financial management at the local
level has created a number of related problems. Because
municipalities do not have trained personnel to monitor and
collect revenue, local revenues are lower than they should
be. Because municipalities do not make proper budgeting
decisions, resources are misused. One local financial
manager was told, for example, to cut expenditures on water
and sewer pipes because such improvements were invisible to
local residents and offered no political gain. Weak
financial management has fostered corruption, and allowed
municipal officials to raise their own salaries despite poor
performance. Salaries of municipal officials were R4 billion
($667 million) greater than spending on public services in
the worst performing 136 municipalities. One municipal
manager in Mpumalanga earned more than President Mbeki,
despite the manager's poor performance. Because revenue
collections are poor, some municipalities have raised debt to
cover their budget shortfalls. Nationwide, municipal debt
now totals R40 billion ($6.7 billion),with the 23 largest

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municipalities accounting for about half.

Government Dedicated to Fix It
--------------


9. (SBU) President Mbeki has tried to get out in front of the
problem by visibly calling for change in the hope of quelling
the unrest to boost the ANC's image in the run up to the
municipal elections. He has spoken out against corruption
and incompetency at the municipal level, but at the same time
pledged greater support. On December 10, he held a town
meeting in the Ilembe Municipality in KwaZulu-Natal (Ref H).
This was part of a series of such meetings in the DPLG's
Municipal Imbizo program. On December 14, Mbeki attended the
ninth and final town meeting in Cape Town, which focused on
the problems of long standing slums in Khayelitsha and
Mitchells Plains. In the meantime, DPLG has been sending out
its "Project Consolidate" teams as fast as it can to help
municipalities in dire need of management and technical
capability (Ref G).


10. (SBU) Taking her cue from Mbeki, Housing Minister Lindiwe
Sisulu is dedicated to speeding up housing delivery. Her
goal is to eradicate all informal settlements by 2014.
Currently, housing is the responsibility of national and
provincial government; however, in 2006, Sisulu is pushing
draft legislation that empowers accredited municipal
governments to deliver housing. She hopes to speed up
low-income housing delivery by removing the national and
provincial bureaucratic burdens that exist. The accredited
municipalities would receive technical assistance from
housing officials during this transition period in line with
Project Consolidate's capacity building teams. In addition,
Sisulu is working to quicken the pace of the housing
development approval process and advocating for low-income
developments to be given preference on state-owned land.


11. (SBU) The SAG has invested considerable political capital
in improving housing for and extending public services to the
poor in South Africa -- the core constituency of the ANC
government. In its October budget, the national government
boosted the budgets of provincial and local governments by
over R50 billion ($8.3 billion) to fund infrastructure and
housing projects. To keep them from choking on this
increased funding, national government will provide
assistance in the form of R1.9 billion ($317 million) over
the next three years to build municipal capacity. Part of
the effort to help local government will be to employ
retirees and foreigners who have the necessary skills.

Comment
--------------


12. (SBU) Since 1994, the ANC government has made strides in
the provision of housing and public services, but still has a
long way to go to meet the needs of South Africa's poorest
citizens. No one knows how long poor South Africans can wait
for government to translate the benefits of political
liberation into a higher standard of living for them.
Despite opposition parties making political hay out of the
situation, the political urgency for the ANC comes more from
the unrest that has spread across the country than from the
prospect of losing political ground at the polls in March.
For the time being, disenchantment with ANC performance will
more likely manifest itself into low voter turnout.
TEITELBAUM