ECIdeas Issue #2, December 2010

Overcoming Public Sector Delivery Challenges in South Africa: Discussions on Delivering the Dream

ECIAfrica Roundtable
Johannesburg Country Club, Woodmead
17 November 2010

By Mwansa Saidi, Ayanda Bam, Nyiko Mabunda

The attainment of democracy in South Africa in 1994 ushered in a new era of both political and institutional transformation aimed at solving the most complex social and economic development challenges in the country. These changes underpinned a democratization effort aimed at prioritizing the delivery of services to previously under-serviced and disadvantaged communities in South Africa. However, the trickle down effects of democratization – the democracy dividends – are yet to materialize for millions. Why is this so? Have we correctly diagnosed the problem? Is the problem financial or is it technical, or are there other explanations? Why have previous interventions not produced tangible and sustainable results? And, most importantly, do we have the appropriate mechanisms and approaches to address these challenges?

On 17 November 2010, ECIAfrica Consulting, a South African-based economic development and management consulting company operating throughout the SADC region, held a roundtable discussion led by Managing Director Dr Claudia Manning, entitled "Overcoming Public Sector Challenges in South Africa" to address some of these questions. The roundtable event drew a wide range of development practitioners, local and regional public sector officials, international donor organisations, and development finance institutions, and the morning was structured to elicit concrete ideas on how best to craft innovative solutions to these seemingly intractable problems.

The literature on this issue highlights the following as the key challenges for the public sector: capacity building of human resources, promotion of public accountability and improvement of service delivery - the absence of which undermines economic growth, political stability and sustainable development.(1) The recent massive wave of protests experienced in various parts of South Africa, commonly referred to as "service delivery protests"(2) provide a strong indication of the growing dissatisfaction with service delivery in the country. Citizens are demanding better housing and public services, and for an acceleration of the pace of the delivery of these services.

There has been much debate over whether the slow pace of delivery is a result of financial constraints. Analysts have pointed to the massive infrastructure backlogs - which have been estimated at hundreds of billions of Rands - as evidence of the real financial challenges facing municipalities (small municipalities as well as big metropolitan councils). Yet there can be no disputing that even those municipalities with considerable financial muscle, such as the big metros, also struggle with service delivery challenges. Indeed, many of the service delivery protests have taken place within the jurisdiction of the metro councils, most of whom have considerable borrowing capacity to fund infrastructure investment. Rather alarmingly, the evidence suggests that even within the much more robust metro councils, capacity constraints are a serious impediment to investment in expanding services.

This situation begs the question of whether there could be a more fundamental and structural problem to these challenges. The roundtable discussed the apparent weaknesses in the governance structures as well as the philosophical approach to governance - political appointments, the ruling party’s practice of deploying people into administrative positions etc. Whilst there appears to be some acknowledgement of the dangers of this approach and high-level efforts to move away from this, many municipalities remain saddled with political appointees occupying senior positions.

The question also arises about the appropriateness of the structure of government, in particular, the structuring of municipal councils: are we organised in the best way to deliver services? There is a good number of local municipalities that can never generate enough revenues and retain required expertise to be self-sustainable. Shouldn’t we be looking at another way of organising ourselves? International practice from various countries has shown that it is possible to outsource delivery and leave government to do what they do best, which is to govern.

At a practical level, the current conventional service delivery mechanisms will take a long time to deliver the scope of services required, given the backlogs indicated above. There is a need to interrogate different delivery mechanism in terms of different partnership models including the Private Public Partnerships (PPPs), Community Private Public Partnerships (CPPPs) and private sector management contracts. However, these delivery mechanisms are viewed suspiciously by the trade union movement in South Africa (as they are associated with privatisation) and the political appetite for entering into these arrangements is weak.

A strong view expressed at the roundtable wes that, despite the vast sums of money spent on designing and funding capacity building programmes, few have had satisfying results. Part of the explanation for this is that programmes are fragmented and lack high-level political support. Another explanation rests with officials’ confusion over the purpose of capacity building interventions - which are intended to be more about the provision of technical assistance and programme management rather than taking over the responsibility of delivery of services. This has resulted in what is commonly referred to as a parallel public service, in which the culture of "substitutionalism" of consultants over paid officials predominates.

The issue of excessive regulation was also highlighted as being responsible for much of the failure of officials to deliver results. This over-regulation has two results. On the one hand, it makes the implementation of basic functions that much more onerous and time consuming; and on the other hand, it creates perverse incentives to avoid potential penalties for breaching the many regulatory and governance compliance requirements.

There was some discussion of the similarities and differences of another African country, Zambia, which exhibits many similar characteristics to South Africa in terms of poor access to services and lack of technical capacity to deliver services. The view was expressed that a much more serious concern in Zambia is the scourge of corruption in both the public and private sectors, which the Zambian Government has thus far failed to address at a sufficiently high level. This has resulted in worrying practices such as the virtual monopoly by politically connected private sector firms in the delivery of certain products and services. Zambian civil society appears not to be engaging robustly with government on these governance breaches, hence government accountability is sub-optimal. In an attempt to enhance accountability and transparency, the Zambian Government has instituted various mechanisms such as the Integrated Financial Management System. A Public-Private Partnership (PPP) unit has been established in the Ministry of Finance, mandated to accelerate the pace of public infrastructure investment through private sector collaboration. It appears that despite capacity constraints experienced in the government, some early wins have been recorded, and indications are that further investment will be channelled through PPPs.

DAI participants provided an interesting and fresh ‘outsiders’ perspective on the roundtable’s conversation, observing that, despite the obvious challenges, South Africa should be commended for having achieved tremendous results in building capacity. It was argued that international experience strongly points to the need for good and democratic governance programmes to move away from "best practices" towards a "best fit" model that takes into account specific contexts. While certain policies have worked in some countries, development practitioners need to avoid imposing or transferring models that have no grasp of local community dynamics. Much of the literature often advocates formal institutional reforms but this recommendation often fails to account for the complex relations between citizens and governments. An "upside-down" view of governance, proposed by researchers at the Institute of Development Studies (IDS) at the University of Sussex, suggests moving away from reforming formal institutions towards the structures, relationships, interests, incentives and institutional spaces that underpin the creation of formal institutions. Much of this involves analyzing the collective action of civil society and looking at ways of designing programmes to get stake-holder buy-in or "incentive schemes." This inclusive nature allows for the integration of everyone into the decision-making process and creating transparency to enable citizens to better hold their governments accountable. A provocative proposal emerging from this discussion was around the need for a mass public campaign to be launched to make the key targets in Government Ministers’ Performance Agreements widely understood, and broken down into concrete and measurable outputs, against which citizens can hold Government accountable.

The forum concluded that it was important that a focused and targeted approach is adopted in capacity building programmes that will prioritize critical areas for intervention, rather than perpetuating the "sprinkler" approach, which tends to dilute the effects of the many valuable interventions being made. It concluded that what is needed is for us to move away from high levels of regulation and the culture of compliance, towards the creation of simple tools and methods for reporting, which should take us a long way in improving the quality of public services. The value of the "demonstration" effects through micro-level interventions in selected public sector institutions was highlighted, providing as it does a series of workable case studies which can be scaled up once tested. Finally, the importance of leveraging private sector technical expertise and capital investment through different partnership models was emphasised as critical to ensure and accelerate the delivery of quality services.

For more information on the roundtable, contact Mwansa Saidi, on Tel: + 27 11 602 1200 or email mwansa.saidi@eciafrica.com