Governance in South African Secondary Cities

Abstract

South Africa has a well-defined set of secondary cities and a local planning regime that provides a governance framework. Its secondary cities have two main characteristics with implications for governance: they lack economic diversity, and they have large rural hinterlands. This chapter uses concepts from evolutionary governance theory to discuss six main governance challenges in these cities: strategic and economic planning, the diverse set of role players, the rural hinterland and the regional services function, mining booms and busts, spatial governance, and the pressure to become metropolitan areas. We conclude that path dependencies, goal dependencies, and interdependencies, compounded by a planning system that emphasises plan making rather than implementation, hamper governance in these cities.

1 Introduction

The South African Cities Network (SACN) initiated research on secondary cities or intermediate city municipalities (ICMs) in South Africa in 2012 with a report entitled ‘Secondary cities in South Africa: The start of a conversation’ (SACN 2012).¹ Several other reports followed (SACN 2014, 2016, 2017, 2019, 2021). The SACN research broadened the urban policy debate, increased the evidence base in these cities, and laid the foundation for policy development. In 2018 the Department of Cooperative Governance and Traditional Affairs launched the ICM Support Programme, which focuses primarily on improving infrastructure. The literature on ICMs expanded with two edited collections (Marais et al. 2016; Marais and Nel 2019), and articles on the role of urbanisation (Marais and Cloete 2017), economic diversification (Marais et al. 2021b), the role of companies in urban management (Pieterse 2022), and the ‘metropolisation’ process (Subramanyam and Marais 2021). Research points to the important social and economic functions of ICMs. Although some case studies have investigated governance issues in these cities (Pieterse 2021; and case studies in the above-mentioned edited books), the literature remains small.

The city categories in the urban hierarchy remain contested, with secondary cities no exception. Marais et al. (2016) use three concepts to categorise cities: size, location, and function. However, policy debates overemphasise the role of size. The demarcation of metropolitan areas in South Africa is a case in point. The Municipal Demarcation Board declared six metropolitan areas in 2001 (Cape Town, Ekurhuleni, eThekwini, Johannesburg, Tshwane, and Nelson Mandela Bay) and by 2011 had added Buffalo City and Mangaung. Most debates over which cities to include were about the size of their economy and population. Boundaries are commonly manipulated to achieve the ‘required’ size. South Africa has no formal definition of ‘ICM’. The term refers loosely to second-tier cities with an important regional function and a large economy. The 39 designated cities have populations between 150,000 and 750,000. Size has dominated the identification of these cities, with very little attention paid to location and function.

There are two problems with overemphasis on size: it ignores the fact that these cities are often part of a larger interrelated urban system and obscures the importance of location and function. Arguments about economic size ignore the role of the rural hinterland and the role of regional services. The rural-urban interaction is important to understand the function. The word ‘intermediate’ in ‘ICM’ reflects the functional role of these cities in the mediating between metropolitan areas and their rural hinterlands.

The fact that South African municipalities are designed to include outlying rural areas has meant that in some metropolitan areas, these are extensive, but not as extensive as in most ICMs. The element of location to define a secondary city could, in some cases, override the emphasis on size. For example, some of the larger urban areas might play the role of a secondary city in sparsely populated areas even though their population numbers may not reach the required threshold. Upington in the Dawid Kruiper local municipality in the Northern Cape is a typical example. Thus, although secondary cities are usually smaller than metropolitan areas (in terms of their economy and population), they mediate between town and country. Often, its location is critical to understanding this role.

Size, location, and function are all important attributes to understand governance. They influence strategy and the ability to steer. They must be understood if long-term dependencies are to be avoided. However, governance and planning often ignore these attributes. We need to analyse governance in secondary cities in South Africa due to their economic vulnerability, extensive rural hinterland, and their link with larger cities. Many of them have one dominant economic sector and often this is mining. This vulnerability requires an appropriate governance response. This chapter uses evolutionary governance theory to analyse the main governance challenges for ICMs in South Africa.

2 Governance and Evolutionary Governance Theory

Urban governance is the process by which governments (local, regional, and national) and stakeholders collectively decide how to plan, finance, and manage urban areas (Avis 2016, p. 1). The word ‘governance’ has a broader meaning than ‘government’ as it includes the roles of the private sector and community organisations. Evolutionary governance theory (Van Assche et al. 2014; Beunen et al. 2015) provides a framework for analysing governance and how it changes. It draws on several earlier theories: biological evolutionary theory, new institutional economics, poststructuralism, social systems theory, new institutional economics, and actor-network theory. It provides a middle ground for politico-economic ideologies. It emphasises non-linear causality and slow change (evolution) and how relationships between markets and societies evolve. We chose to use evolutionary governance theory because it provides a framework for understanding changes in governance. It acknowledges that this change is slow, observes that failure to change is often rooted in historical actions and strategies, and emphasises the complexities of governance and its interrelationships.

Evolutionary governance theory identifies three types of dependency: path dependency, goal dependency, and interdependency. The concept of path dependency originates from historical institutionalism (Krasner 1984) and new institutional economics (North 1990, 2005). It refers to how historical decisions influence current choices. A notable example of path dependency is our dependence on the QWERTY keyboard. Designed more than a hundred years ago to prevent the keys of a typewriter from jamming, this keyboard format is still used even though typewriters are obsolete. Different keyboard settings could improve typing speed, but changing is far too difficult and would be disruptive. The QWERTY keyboard is a typical example of what North (2005) refers to as ‘lock-in’ or the inability to escape the consequences of historical decisions. Not all path dependencies lead to lock-ins, but most governance choices are made based on history. Although each new policy or strategy sets out a new path, the path rarely straddles the boundaries of decisions taken in the past.

Goal dependency refers to the way shared visions affect current decision-making (Van Assche et al. 2014). The Sustainable Development Goals are an example of a shared global vision. However, some of these goals may not be appropriate for all societies or might even be counterproductive. Marais (2023) has shown how South Africa’s goal of replacing the apartheid system of migrant labour and hostels has led to poor housing for mineworkers. The policy has ignored the fact that migration may be valuable to mineworkers. This shows how implementing a shared vision can fail to achieve the original intended result.

Interdependency refers to the relationship of trust or conflict between people and their organisations. As Van Assche (2016, p. 21) explained, ‘actors depend on other actors and institutions, at one point in time, while institutions depend on actors for their production and reproduction’. Good governance requires both collaboration and alternative ideas. For example, the real estate industry requires collaboration and trust between real estate agents, banks, and attorneys. Trust helps simplify the complexities. However, conflict and alternative ideas need not be negative. A functioning democracy requires both opposition (alternative thinking and conflicting ideas) and collaboration (policy making).

To overcome these dependencies, governments use strategies to change the status quo. This is often referred to as ‘steering’. Beunen and Van Assche (2021) say that ‘steering’ is the ability of governments and partners to develop strategic, policy, and planning solutions to problems. Steering, in turn, is associated with the New Public Management paradigm, which emphasises plan making over implementation (or ‘rowing’). The conflict between dependencies and the ability to steer or find alternative strategies is at the heart of governance challenges. Strategic planning provides a way to develop new governance paths despite dependencies. Steering has been criticised (Klijn 2008), and, more recently, the focus has shifted to ‘network steering’ (the emphasis on building networks while steering or using steering to create networks). Still, despite some promise, there is very little evidence of success.

3 Methods

The chapter originates from extensive research on South African secondary cities over almost a decade. The research started with an assignment from SACN (2014). In addition to the long-standing work, the article was informed by four case studies of governance and economic planning in secondary cities in South Africa. Comparative case studies include Matjhabeng, Rustenburg, Emalahleni, Newcastle, and Sol Plaatje. This includes document analysis of policies, annual reports, and 16 key informant interviews in the 5 cities and 2 workshops with participants from Rustenburg and Sol Plaatje. We used thematic analysis to identify governance themes.

4 Governance Challenges in South African ICMS

We provide an overview of governance and then discuss six themes associated with the governance of ICMs: strategic and economic planning, the diverse set of role players, the rural hinterland and the regional services function, mining booms and busts, spatial governance, and the pressure to become metropolitan areas. Although we discuss these six themes individually, we acknowledge that they are interrelated.

4.1 Overview of Governance in ICMs

The ICM Support Programme identified 39 ICMs in South Africa, as shown in Table 4.1, which is too many. Although many cities may fall into the population size range mentioned above, their economies are not large enough to qualify as an ICM in our opinion. Table 4.1 and Fig. 4.1 show the diversity of these cities, grouped into five categories.

Table 4.1 Categorisation of ICMs in South Africa

Fig. 4.1

Locations of ICMs

Together, these 39 ICMs contribute 24% to GVA in South Africa and host 27% of the population. However, despite the importance of these cities for the economy of South Africa, the evidence points to inadequate governance and an inability to solve complex problems. Many ICMs are vulnerable because their economies are less diverse than those of metropolitan areas. Most of them depend on a single economic sector (usually mining or manufacturing), which is dependent on a volatile global market whose ups and downs are beyond local government control. Very few of them have been able to create alternative economic sectors and reduce their economic vulnerability. This has serious governance implications.

Finding the right personnel is another problem that affects their governance. The number of staff vacancies indicates the ability of an organisation to attract and retain staff. The SACN found that 23% of local government posts in ICMs are vacant, compared to 11% in metropolitan areas (SACN 2021). An earlier report (SACN 2017) pointed to the lack of appropriate staff competencies for spatial planning in ICMs. Very few of these municipalities developed their spatial plans in-house. Staff shortages lead to inefficiencies, as can be seen in an estimate by SAPOA (2017) of the costs associated with slow approvals of new land developments in Mbombela. Similar competency problems exist in local economic development (SACN 2019). These municipalities rarely appoint economists to their economic development units or forecast economic scenarios. Failure to consider alternative economic futures means that planning seldom considers uncertain futures.

In addition to staff problems, there is an array of governance concerns about municipal finance, such as citizens refusing to pay municipalities for services and municipalities struggling to pay their creditors. Of the ten municipalities that owe the largest amounts to Eskom (South Africa’s electricity utility), five are ICMs (SACN 2021). Only 45% of the ICMs obtained an unqualified audit (during the 2019/2020 financial year). In the 2017/2018 financial year, the proportion of ‘fruitless’, ‘unauthorised’, or ‘unacceptable’ expenditures was 24%, compared to 9% in metropolitan areas, and these expenditures were higher per capita in ICM (R1176) than in metros (R830) (SACN 2021). There are also concerns about political leadership in ICMs. The mayors of approximately 38% of the ICMs did not complete their 5-year term (2011–2016) (SACN 2021). None of the metropolitan areas had this experience during that period. This inability of mayors to complete their terms points to more political instability in ICMs than in metropolitan areas.

4.2 Strategic and Economic Planning

Strategic planning is important for ICMs as they have the potential to grow and avoid the mistakes that larger cities make. The integrated development plans (local strategic plans, known as IDPs) that South African municipalities must create are inspired by the New Public Management paradigm (Harrison 2001), which came to prominence in the early 1990s and favours steering over rowing.

Table 4.1 shows ten ICMs in the mining category and nine others have mining sectors greater than 12%. There are nine in the manufacturing category, and those in the semi-diverse category also have substantial manufacturing sectors. Their strategic planning aims at economic diversification to counteract their vulnerability to global market volatility. However, the success has been limited. Marais et al. (2021a, p. 382) argue that economic transitions are ‘particularly difficult for mining towns ... because the mines create a false sense of security’, a form of path dependency that reveals a mindset of continued historical prosperity. Consequently, the strategic plans of ICM assume long-term prosperity, despite evidence of economic and population decline (Marais and De Lange 2021). Except for Newcastle, all mining ICMs have struggled to transit from mining (Marais et al. 2021b). Mining and manufacturing companies play a dominant role, and it is not uncommon for some companies to perform municipal functions (Marais et al. 2022), creating a long-term interdependence that can be disrupted when a mine closes.

Plan making, often on a grand scale, tends to dominate, to the neglect of implementation, and unrealistic assumptions are made about funding from other spheres of government. Matjhabeng and Rustenburg are prime examples of this (SACN 2021). In Matjhabeng, where economic diversification remains elusive after 30 years, various organisations operating outside the ambit of the municipality (in line with the New Public Management paradigm) have tried to deal with the problems caused by the decline of the mines (Marais 2013), but they continue to suffer political interference. Most municipal plans assume that investment will come from other branches of government. Big plans overshadow small incremental projects, and planners blind to natural economic diversification processes. Their plans do not, for example, refer to a regional services function. And the possibility of the city shrinking is not considered.

Rustenburg has been proactive in developing a strategy to counter the decline of mines. Although some mining retrenchments have occurred over the past decade, the area still depends on platinum mining. The likelihood of mine decline has led to the appointment of consultants from a Singapore-based consulting firm to develop a post-mining plan (Mosiane 2021). This plan has many grand ideas that rarely reflect reality. Rustenburg is more closely associated with Singapore than with African urbanism. The city ignores the possible benefits of its links to Gauteng, South Africa’s economic powerhouse. Its plans make little reference to the importance of roads and other links with Gauteng but rather set Rustenburg up for direct economic competition with Gauteng, a battle it is unlikely to win.

Mining and manufacturing create several dependencies. Governance approaches assuming long-term prosperity are an example of path dependency. Perception of long-term prosperity makes it difficult to imagine decline. Consequently, local governments plan for growth even when the economy declines (Marais and De Lange 2021). There is also evidence of goal dependency. The goal of using mining as a foundation for development can overshadow the possibility of mine closure (Marais 2023). Housing policymakers in mining areas promote homeownership, oblivious to the likelihood of decline. Appropriate migration between labour-sending areas and mines could be a better way for mineworkers to manage the temporality of mining. Finally, strategic planning is affected by the interdependence between local governments and large companies. Mining companies, as mentioned above, have taken over some local government responsibilities, such as providing water or repairing electrical infrastructure.

4.3 Diverse Set of Role Players

Earlier, we noted that governance goes beyond government and includes interactions between government, the private sector, and community-based organisations. In practice, these interactions include liaisons with multinational corporations and traditional authorities, organisations whose demands differ. Mining corporations employ large numbers of people, bolstering the financial viability of municipalities but also creating local problems in the form of tailing dams, pollution, and social disruption. Traditional authorities manage large tracts of land, creating a conflict with municipalities about the maintenance of this land. These organisations become part of the governance of cities and influence the thinking of decision-makers (in some cases, traditional leaders have representation on local councils). The interdependence between government and traditional leaders and multinational corporations is a specific governance challenge for ICMs. Although some metropolitan areas (eThekwini, Mangaung, and Tshwane) have similar situations, their large economies and diverse economic sectors make it easier for them to cope.

Different skill sets are required to manage these two types of organisation. Companies usually have specific requirements for themselves and their employees. Large investments result in an influx of people and put pressure on municipalities to develop new land, sites, and services. Companies have specific water and electricity service requirements. The challenge is to support companies while managing adverse consequences. This reality is compounded by the fact that these multinational organisations must deal with global market volatility, which in turn has local economic implications. Where there are traditional authorities, the challenge is how to service the land. Mineworkers have settled on large pieces of land managed by traditional authorities (Marais et al. 2021a). Providing municipal services on such land is difficult because traditional authorities see this as undermining their authority and the result can be conflict (Ntema 2019).

The planning nature of steering is not appropriate to deal with these realities. These interdependencies between secondary city municipalities, multinational corporations, and traditional leaders require appropriate networks and facilitation.

4.4 The Rural Hinterlands and Regional Services Function

A notable characteristic of a secondary city is a rural hinterland or a regional services function. Many people in rural areas travel to the city to buy higher-order goods and access specialised services (health, education, banking, insurance, etc.). Yet planners tend to neglect the rural services function for various reasons: it is a low-key approach (contrasting with big plans for economic diversification), it is a function that develops automatically, and very few people notice its value, and analyses using the nine main economic sectors and their subsectors do not give direct information about the regional services function.

So, what can secondary cities do to promote their regional services function? Very few practical guidelines exist. Good rural roads would help, giving rural people access to the city. Good access to other small towns is also important. But roads between towns and cities are usually the responsibility of the provincial government. Active collaboration between local and provincial governments (another example of interdependency) is required to ensure that something is done. Another requirement is adequate trading spaces to ensure that the town can attract higher-order goods. In many cases, this second requirement is all that ICM planners focus on. Other ways to improve the function of regional services would be to build hospitals and schools (private or public) with boarding facilities. These facilities would require guest houses and overnight accommodation for relatives of people who use them. Cities could use their land use systems to facilitate this, for example, by giving preference to developments with a regional services function and speeding them up. Tax rebates on new developments with a regional services function could also help.

Local governments must move away from grand plans to understand and develop the function of regional services. They must consider who the actors are and how to help them through land use planning. Rather than focusing on plan making, they need to put their energies into building appropriate networks. To do this, they need to understand the less dominant economic interdependencies.

4.5 Mining Booms and Busts

Mining is a major economic sector in approximately half of South Africa’s ICMs. Historically, diamonds, gold, and coal created mining towns, with platinum, iron ore, and manganese becoming prominent over the past three decades. The resource boom of the early 2000s boosted the economy of many of these towns, but some experienced busts. Both booms and busts require governance responses (Van Assche et al. 2020). ICMs have found it difficult to deal with both. Booms bring a large influx of people. Rustenburg is a good example of a rapid increase in population since the early 1990s, an influx further complicated by people settling on traditional land (Ntema 2019) and making it difficult for the municipality to provide services, as traditional authorities are unwilling to permit this. Booms can create governance problems. Emalahleni is an example where booms have given an impression of long-term prosperity. The governance response has been to waste large amounts of money due to the municipality’s perception that it was rich (Campbell et al. 2017). As a result, the city has been on the verge of bankruptcy for the past decade and owes Eskom more than R5 billion.

The possibility of a town shrinking and what to do about this is not discussed in governance or planning. Merafong City, for example (a former gold mining area), has seen a decline in its population and municipal revenue (Marais and De Lange 2021). However, little thought has been given to the value of decline. Most of the plans focus on the reform of the economy and further growth. Planning for booms and busts must be flexible. But this is hampered by the rigid IDP process (missions and visions, once established, are seldom reconsidered in a specific cycle), the focus on steering, and inflexible land use planning systems.

A boom creates a path dependency based on the expectation of continued economic prosperity. The result is that the decline is ignored. Interdependencies change when busts replace booms. Mining companies are in a mode of managing the decline. Common responses from mining companies are to sell to smaller companies or place the mine in care and maintenance. Ownership changes mean that government officials must negotiate with other companies, and this usually changes the social investment strategies and existing interdependencies.

4.6 Spatial Governance

Spatial governance is important due to the country’s history of segregation and apartheid planning. Ironically, post-apartheid housing policy has largely reinforced historical patterns (Huchzermeyer 2010), and the post-apartheid planning approach has loosened political control of planning in South Africa (Harrison and Todes 2015). Although this has been a welcome development, it has created new problems. The Integrated Urban Development Framework (IUDF) is the government’s latest attempt to guide the spatial transformation of all South African cities (CoGTA 2016). The IUDF acknowledges different types of settlement and makes specific references to ICMs. It has four goals: spatial integration, inclusion and access, inclusive growth, and appropriate governance to improve state capacity. In the following, we outline our concerns about spatial governance in the ICMs.

Very few spatial development plans are drivers of development in ICMs (SACN 2017). ICMs struggle to implement plans, and the lack of implementation, in turn, reinforces the emphasis on plan making. Part of the problem is difficulty obtaining competent staff. Those currently employed have little institutional memory and experience and do not satisfy the expectations of large firms and poor communities. ICMs need a nuanced application of the ideas in the IUDF. For example, they should focus more on overcoming their economic vulnerability (because of dependence on mining), improving their rural-urban links (including dealing with planning difficulties with traditional land), and managing urban sprawl (Marais et al. 2020).

ICMs could exploit land use and spatial planning to reduce their economic vulnerability. They could start by focusing on post-mining land use and ensure that the mines rehabilitate land to make it usable for alternative economic purposes. They must take the rural-urban interaction seriously and establish a flexible land use system to improve the function of regional services. It will be difficult to change the segregated and fragmented nature of South African cities. But ICMs should find it easier to change than larger cities, which have a longer history of following the path of segregation.

4.7 Metropolisation

One common theme in ICM research is their desire to become metropolitan areas, largely due to a desire to improve their status and the perception that metropolitan municipalities receive more money from the national treasury. The addition of Buffalo City and Mangaung to the list of metros has encouraged ICMs to strive for upward mobility, in the belief that they could be next.

Polokwane, George, Mbombela, and Rustenburg all want to become metropolitan municipalities (metros). Their arguments are usually about status, getting higher salaries or councillor allowances, or, simplistically, population size. They think it will be easy to expand the municipal area and increase the population, a manoeuvre that was successfully used to make Mangaung a metropolitan area. They argue that there should be at least one metropolitan area in each province. Yet, as we noted in the Introduction, their arguments seldom reveal a nuanced understanding of location and function. Appropriate local economic data are scarce, and analysts discredit the available data. Furthermore, local protagonists ignore the risks and vulnerabilities of becoming a metro, with Mangaung being a case in point (Subramanyam and Marais 2021). Within 10 years of Mangaung’s improvement of status, services have deteriorated, and the municipality is in a poor financial position and has been placed under administration (i.e. the national government has taken over the management of the municipality despite the fact that the political council is still in control).

The desire to become a metro can be seen as an example of goal dependency, and Mangaung is an example of the problems that spring from achieving an ill-advised goal. The transformation of a metro has put more pressure on municipal finances and capacities than Mangaung can cope with. A more appropriate response from ICMs would be to understand and accept their role in the space economy and to do the best they can from it.

5 Conclusion

South Africa has made good progress in understanding the role of ICMs in the urban system and developing a policy approach. However, governance in many ICMs is poor. The core of these concerns is the vulnerability of these cities because they lack economic diversity. The economic sectors on which ICMs are based are at risk of volatility in the global market. Against this background, the chapter used evolutionary governance theory to discuss six main governance challenges for ICMs in South Africa: strategic and economic planning, the diverse set of role players, the rural hinterland and the regional services function, mining booms and busts, spatial governance, and the pressure to become metropolitan areas.

We think that the dependence on steering in the plan-making process and the effect of dependencies make governance in ICMs difficult. There are several path dependencies. Historical spatial planning is an example of how path dependence affects urban planning and encourages sprawl, despite new policy guidelines. Another notable path dependency is planning on the assumption of continued economic prosperity. The dependency on goals is evident in the expectation of ICMs that they can become metropolitan areas (without considering the practical problems). The general expectation that mining should support local development is an ill-advised goal dependency when mine closure threatens. The range of interdependencies between traditional authorities and multinational corporations and different spheres of government further complicates governance in ICMs. To escape these dependencies, ICMs need to plan for current realities and focus on networks and governance rather than steering. Plan making must be accompanied by the ability to create change and find new governance approaches.