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2016/17 Annual Report

The Annual Report is presented in terms of the provisions of section 220 of the Constitution, 1996, section 40 and 65 of the Public Finance Management Act, 1999 and section 26 of the Financial and Fiscal Commission Act, 1997 (as amended). The financial year 2016/17 has seen numerous successes for the Financial and Fiscal Commission as a source of high-quality expert and independent advice for equitable sharing of nationally raised revenue, in building capacity among legislators, and in consolidating its role as foremost constitutional body in promoting a sustainable and equitable intergovernmental fiscal relations system. Our annual constitutional and legislative Submissions: Division of Revenue; Response to the Medium Term Budget Policy Statement; Response to the Division of Revenue Bill; Appropriations Bill; Response to the Fiscal Frameworks and Revenue Proposals were delivered in line with our 2016/17 Annual Performance Plans.

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2018/19 Submission for the Division of Revenue

"The Intergovernmental System and Urban Development in South Africa”. Enhancing the economic performance of cities now occupies centre stage in policy discourse in South Africa. Within this context the country aims to achieve faster, more inclusive and sustainable growth. Achieving inclusiveness involves addressing poverty, group equality, regional balance, inequality and empowerment. Urban economies play a significant role in all of this. The Submission looks at how the intergovernmental fiscal relations system can be leveraged to make use of the potential of accelerated urbanisation, to drive the positive transformation of the economy toward the attainment of rapid economic growth that reduces inequality and eliminates poverty.

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Policy Brief 10 - Farm Evictions and their Impact on Local Municipalities

Improving Since 1994, government has introduced numerous laws, policies and initiatives to regulate and improve the situation and rights of farm dwellers and farm workers, who remain among the most vulnerable in society. However, unintended consequences have created a climate of uncertainty in the agricultural sector, exacerbated by the continued eviction of farm dwellers and workers from farms. The responsibility of caring for the evictees falls on rural municipalities, thereby creating an unfunded mandate. Municipalities have to use their own funds because currently the intergovernmental fiscal instruments do not cater for evictions. The Financial and Fiscal Commission (the Commission) examined the extent of the burden on rural municipalities and found that costs relating to evictions have increased over the years. In some cases, these costs are equal to 1% of the municipality’s local government equitable share (LGES).. 

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Policy Brief 9 - Reviewing the Effectiveness of Sanitation Fiscal Instruments and Governance in Enhancing Rural Development?

Improving sanitation reduces the risk of infection from excreta-related diseases, especially for children under the age of five. Since 1994, the government has introduced programmes to reduce the high sanitation backlogs in South Africa. Sanitation backlogs have decreased overall but remain high in rural areas. To understand some of the reasons for the slow progress in reducing sanitation backlogs in rural municipalities, the Financial and Fiscal Commission (the Commission) undertook a review of constraints within the current intergovernmental fiscal relations system and weaknesses of current institutional arrangements. The study found that backlogs remain high in rural municipalities because the Rural Household Infrastructure Programme is underperforming, and municipalities are under-spending the Rural Household Infrastructure Grant. Reasons for this include the design of the grant (as an indirect grant), the failure by municipalities to submit business plans on time and to prioritise sanitation infrastructure by including it in their integrated development plans and maintenance plans.

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Policy Brief 8 - Are District Municipalities Necessary?

Local government has a key role to play in rural development, through the provision of basic services and infrastructure. However, infrastructure backlogs remain high in rural municipalities (because of under-spending
of capital budgets), and the allocation of functions between district municipalities (DMs) and local municipalities
(LMs) is ambiguous. The Financial and Fiscal Commission (the Commission) looked at how efficiently rural municipalities use intergovernmental transfers and how effective they are in driving rural development. The
study found that LMs use resources less efficiently than DMs and have higher staff vacancy rates. Many of the
functions that DMs should be performing are increasingly shifting to LMs, especially in urban areas.

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Midrand Contact Details

Second Floor
Montrose Place, Waterfall Park
Bekker Street


Tel: 011 207 2300
Fax: 011 207 2344

“For an Equitable Sharing of National Revenue"


0861 315 710

Cape Town Contact Details

Twelfth Floor
Constitution House
124 Adderley Street
Cape Town

Tel: 021 487 3781
Fax: 021 426 4935