Municipal infrastructure investment push and pull factors : selected South African cases

Abstract

According to the World Bank Group’s 2020 Ease of Doing Business Index, South Africa ranks 84th out of 190 countries with a score of 67 points. Relative positive factors as far as business attractiveness is concerned include aspects related to starting a business (81 points) and the protection of investors (80 points). A key indicator of the country’s economic status is municipalities’ performance. Municipalities are at the centre of economic activity and should establish a conducive environment for investment in infrastructure development. This article outlines the findings of a survey undertaken with the support of the South African Local Government Association (SALGA) at selected municipalities in South Africa (SA) to uncover the business push-and-pull factors associated with municipal infrastructure investment. The aim of the study was to identify municipalities that have been affected by disinvestment and to document their weaknesses. Furthermore, the study set out to identify municipalities that have been able to attract investors and record their winning strategies. A situational desktop analysis by means of a SWOT analysis was undertaken. Results were then triangulated with findings of semi-structured interviews and a questionnaire distributed to seven target groups consisting of representatives of sampled municipalities, stakeholders (i.e. district and provincial investment development agencies) and organised business. Results of the thematic analysis of findings reveal that systemic challenges such as poor service delivery levels, corruption, inefficiencies, failing governance structures, the absence of institutional mechanisms to fast-track investor applications, and the lack of dedicated business management advisory units all act as investment push factors. The practical value of the study is promoted by recommendations for municipal business investment praxis.