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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