Treasury urges citizens to track municipal spending, demand accountability:
The treasury has urged civil society organisations and citizens to participate in governance processes by holding the country’s failing municipalities accountable for their budgets and spending.
A webinar, titled “From your pocket to public services: tracking municipal budgets” and hosted by the treasury this week, highlighted the ways in which people can monitor municipal spending using publicly available financial data and report irregularities for investigation.
Treasury director general Duncan Pieterse said the aim of the meeting was to equip civil society to play a role in ensuring that funds are spent responsibly,appropriately and transparently on the delivery of services.
“We want to provide citizens with a better understanding of the local government fiscal framework, municipal budgets, the data collection process, how municipal expenditures translate into service delivery, and how to better use the current financial data to hold their municipalities accountable,” he said.
“We hope that the information that we share today will equip citizens to engage meaningfully in municipal consultation processes such as the integrated development planning or IDP and budgeting processes in their respective municipalities.”
Pieterse said the treasury had launched the open local government data portal www.municipalmoney.gov in 2016 to provide citizens with access to comparable and verified information on the financial performance of each municipality.
“Municipal Money aims to promote transparency and citizen engagement through the visualisation and demystification of information about municipal spending.” Pieterse said.
“Civil society in South Africa contributes significantly to fostering a democratic environment where governance and accountability can thrive.
“Civil society organisations and ordinary citizens should be actively involved in exercising oversight and holding leadership accountable, using their voice in governance and decision-making processes to ensure that their concerns are addressed. This will lead to one desired result, an improvement in the lives of people in municipalities, to better budget management and service delivery,” he said.
Patrick Sokhela, chief director for international cooperation at the department of public service and administration said the government was reviving the Open Government Programme (OGP) to ensure it was up to international standards.
South Africa became a founding member of the OGP in 2011 along with Brazil, Indonesia, Mexico, Norway, Philippines, United Kingdom and United States when it endorsed the Open Government Partnership, a global initiative aimed at securing commitments from national and sub-national governments to promote open government, combat corruption and improve governance.
The initiative brings together governments and civil society organisations to work together on open government reforms to promote transparency, accountability, and citizen participation in government.
Sokhela said the treasury was playing a key role in reviving the programme.
“The national treasury leads the first commitment on transformative fiscal transparency, which seeks to ensure that citizens have access to fiscal information, that will empower them to hold public representatives accountable and in turn, combat corruption,” he said.
The treasury’s senior manager, Sello Mashaba, and the director of local government budget analysis, Mandla Gilimani, focused on section 71 of the Municipal Finance Management Act (MFMA), which outlines the reporting requirements for municipalities to provincial treasuries and how citizens can access these reports to hold local government accountable.
These reports provide a detailed overview of municipal revenue and expenditure against their approved budgets, facilitating same year management and oversight.
Gilimani said municipalities submitted quarterly and monthly financial reports to the treasury that are publicly accessible on its website and which serve as early warning systems in the monitoring of financial activities.
These include monthly reports, the Funded Budget, the State of Local Government Finances Report, the Auditor General’s Report, the Ratios Circular 71 and 88, and Section 138 and 140 Triggers Quarterly Reports, which indicate when a municipality is experiencing serious financial problems. The reports include data such as financials on payments made to Eskom and the water boards, revenue billing and collection information.
“We want the public to be aware of the availability of the monthly report that is done by municipalities and submitted to the national treasury database on a monthly basis.”
“We want the public to be empowered that they are able to interpret that report, and also to be aware that this report serves as a mechanism to track the performance of a municipality, which then can be reported to our oversight bodies, which is the provincial treasuries … then they can engage with that information and intervene if there is a need to,” he said.
He said municipal budgets should be funded realistically, based on what has happened in the past year.
“We often notice that municipalities will just inflate revenue projections, and also with the aim of justifying the expenditures that they are putting into those budgets,” he said.
“We also have the state of Local Government Finance Report. This report is based on the audit outcomes that would have been issued. So it’s a report that will definitely tell us, realistically, what is happening at municipalities.
“Do we have an increase in the municipalities that are in financial distress, or do we see an improvement in that regard?”
He said the reports are all available on the treasury website.
Tariffs, power and the myths of free trade:
The word “tariff” is a reminder that the global economy was never about goods alone — it was always about the flow of power. “Tariff” comes to us through the Arabic ta?r?f, meaning “to make known” — a declaration of terms, an act of setting boundaries. But in the world forged by colonial conquest and industrial capitalism, tariffs became far more than notifications. They became weapons.
A tariff, at its simplest, is a tax on goods crossing a border. Yet its simplicity masks a long and often violent history. Tariffs have been used to nurture industries and to destroy them, to build empires and to strip colonies bare. They have shaped the global economy in ways that remain with us today.
Before Britain became the champion of free trade, it was a staunch protectionist. For nearly two centuries it relied on measures like the Navigation Acts, prohibitive tariffs, and what is now politely termed industrial espionage, to protect and grow its manufacturing base.
It was only in the 1840s — once Britain had already achieved global industrial dominance — that it embraced free trade. The repeal of the Corn Laws in 1846, often celebrated as a triumph of free-market ideals, came only after Britain had secured its industrial dominance. As the great historian Eric Hobsbawm notes, Britain’s turn to free trade was not a principled commitment to liberalism but a strategic shift — having used protection to rise, it now sought open markets for its goods abroad.
The US has followed a similar trajectory. In the 19th century, it maintained average tariff rates of between 40% and 50% on manufactured goods — among the highest in the world. Like Britain, the US used tariffs to protect its “infant industries”, shielding domestic producers from foreign competition while building the foundations of its industrial strength.
Once these powers were in control of the global economy, however, they denied others the right to follow the same path. What the 19th-century German economist Friedrich List called “kicking away the ladder” became a defining feature of imperial economic policy. Protectionism was for the strong. The rest were told to compete on open terms — even if they had no chance.
The story of Bengal offers one of the clearest examples of how tariffs and trade policy were used as weapons of economic conquest. In the early 18th century, Bengal was the world’s leading producer of cotton textiles. According to the historian Prasannan Parthasarathi, wages for skilled Bengali textile workers were among the highest in the world, and its muslins and cottons were traded as luxury goods across Asia, the Middle East and Europe.
But Britain, seeking to protect its own industries, imposed punishing tariffs on Indian textiles — in some cases as high as 80%. The Calico Acts of 1700 and 1721 banned or heavily taxed the importation of Indian textiles into Britain. After the British East India Company gained military and political control over Bengal following the Battle of Plassey in 1757, the assault intensified. British goods were exported into India tariff-free, while Indian producers were burdened with taxes and restrictions.
The results were catastrophic. Between 1750 and 1810, India’s share of the global textile trade collapsed from around 25% to under 5%. British textile mills — powered by colonial cotton, enslaved labour and protected by tariffs — rose as Bengal’s artisans were plunged into poverty. Though some colonial apologists have dismissed the more lurid stories of weavers’ thumbs being cut off, the broader truth is undeniable — through tariffs, trade restrictions and military domination, a thriving industrial economy was dismantled to clear space for British industrialisation.
Across the world, similar patterns have repeated. Western powers often enforced unequal trade through “gunboat diplomacy”. Haiti, the world’s first black republic, was blockaded by European and American warships after its revolution in 1804 — eventually forced to pay an enormous “independence tariff”.
In 1853, Commodore Matthew Perry’s “Black Ships” forced Japan to open its markets. After British naval bombardments during the Opium Wars of the 19th century, China was compelled to accept the opium trade and sign “unequal treaties” that ceded key ports and legal powers to European powers, independence indemnity debt” to France and accept punishing trade terms that would cripple its economy for generations.
As formal empires gave way to subtler forms of dominance after World War II, military coercion was replaced by economic leverage. The post-war Bretton Woods institutions — particularly the International Monetary Fund and World Bank — assumed the role once played by imperial gunboats. Aid and loans were tied to “reforms” that opened markets, privatised public assets and subordinated national planning to global capital.
In the 1980s, structural adjustment programmes swept through the Global South. African countries that had used tariffs as part of broader efforts to foster national industries were forced to liberalise trade in exchange for desperately needed loans. The consequences were devastating. Local industries collapsed, state capacity weakened and poverty deepened.
The Washington Consensus — that mix of liberalisation, deregulation and fiscal austerity — was promoted as a path to prosperity. In reality, it locked countries into dependency.
South Africa was no exception. Following the end of apartheid, the country committed to sweeping trade liberalisation. In 1994, South Africa signed on to the General Agreement on Tariffs Trade framework and later joined the World Trade Organisation. Between 1996 and 2004, tariffs on clothing were cut from nearly 90% to about 40%; footwear tariffs fell from 60% to 30%.
These reductions coincided with China’s entry into the World Trade Organisation in 2001, triggering a surge of cheap imports. In places like Durban and Cape Town, where whole communities depended on clothing factories, the effects were brutal. By some estimates, more than 75 000 jobs were lost in the clothing sector between 2002 and 2006.
At the same time, the US continued to protect its own industries. Generous cotton subsidies helped American farmers undercut producers across West Africa, depressing prices and squeezing rural livelihoods. The global rules were never neutral — they reflected the interests of the powerful.
Tariffs reappeared on the global stage during Donald Trump’s first presidency. Between 2018 and 2020, his administration imposed tariffs on more than $ 350 billion worth of Chinese goods and targeted multiple allies with new duties. But this new tariff regime was driven less by strategic industrial planning and more by political theatre.
While tariffs once protected rising industries, today’s context is vastly different. According to the US Census Bureau, manufacturing now makes up just 11% of the US economy — down from 28% in 1953. Only about 8% of US workers are employed in manufacturing, compared to 30% in the 1950s.
A 2021 study found that Trump’s tariffs had raised costs for consumers and businesses but did not result in a measurable increase in domestic manufacturing jobs. Most firms simply shifted supply chains to low-cost countries. The attempt to use tariffs to reverse decades of deindustrialisation ran into a hard truth — once factories close, skills atrophy and supply chains fragment. Reviving an industrial base requires more than border taxes, it demands sustained investment, strategic planning and a political economy geared towards production over speculation.
The history of tariffs is not a morality tale of free trade versus protectionism. It is a story of power; of who could build behind walls, who was denied that right and who still bears the scars. From the abandoned looms of Bengal to the closed clothing factories of Cape Town and the hollowed-out steel towns of the American Midwest, tariffs mark a deeper story — one in which the rules of trade have been written and rewritten by the strong at the expense of the weak.
In today’s fractured global economy, where economic nationalism is resurging, the old lessons remain. Tariffs can nurture local industries or deepen inequality — the outcome depends less on ideology than on power, context and intent.
Vashna Jagarnath is a historian; political risk and diversity, equity and inclusion consultant; labour expert; pan-African and South Asian political analyst and curriculum specialist.
South Africa’s political parties are fighting the wrong budget battle:
The budget debate has become a theatre of rancorous noise. Political parties, having chosen to bicker over changes in VAT rates and inflationary adjustments on personal income tax thresholds, have overlooked what they all seemingly agree on.
Most parties in parliament concede that the current fiscal framework is unsustainable and requires radical reform. A big part of that, most would concede, involves greater work on the expenditure side, providing an important and opportune moment for a richer civic discussion on the budget. It is in that spirit that we write this article.
While the distributional effect of VAT and “bracket creep” is regressive, we do not believe that this is the sole question that should occupy us. Precisely as the fallout from American trade policy has spiked 10-year bond yields as a signal of base rates for borrowing across the economy but also the terms on which the state will borrow.
This raises another fundamental question relating to how and where the state spends the money collected from either revenue proposals or public borrowing requirements. This question uncovers institutional and other challenges in the state, not just in relation to what it collects, but how it spends what it collects.
The fixation on VAT — a regressive but easy-to-collect revenue stream — distracts from the real crisis unfolding on the expenditure side. Our country faces pervasive public goods unavailability and service delivery crises, despite its over R2 trillion gross revenue take. Until parties shift their focus from tax tinkering to more stringent expenditure accountability, South Africa’s fiscal debates will remain esoteric exercises with little impact on citizens.
The VAT obsession: A convenient distraction
The VAT discussion, as in 2018, has become a political football. Amid the rivalrous chatter about it lies a concerning reluctance to confront systemic execution failures in expenditure. The 2018 VAT panel, appointed by then minister Nhlanhla Nene to consider a list of food and non-food items to incorporate in the basket of VAT zero-rated goods, made an important and prescient observation — it would be cheaper to return the cost of the VAT increase to the poorest households by expenditure programmes than to extend zero rating.
The panel further noted that the challenge rested in the extent to which social wage and public goods-focused investments actually reach “the bulk of low-income households” — whether the money spent ultimately benefited townships, villages and cities with the envisaged growth, investment and jobs.
Expenditure: Where the real crisis lies
Municipalities and state-owned entities are the main agencies seized with capital expenditure on roads, bridges, clinics, schools, treatment works and dams, among others. These are areas crucial to economic and social activities.
The South African legal framework requires that budgets of organs of state are spent in an economic, efficient and effective manner. The auditor general highlights the impact of underspending of conditional grants linked to service delivery contributing to delays in completing infrastructure projects aimed at improving service delivery to communities.
So too have we seen crucial grants made to state-owned companies for commuter rail, passenger bus services and other service-focused infrastructure being chronically underspent.
The reasons? Poor project management, ineffective contract management and delays in procurement processes rank high as causes for chronic underspending in municipalities and state-owned entities.
A Way Forward: From VAT battles to spending realism
While proposing a way forward might be tricky, a starting point has to be “systemic” rather than “episodic’” issues. For instance, is it still sustainable to assume that over 200 local authorities will all have the personnel and other capacity to spend on capital budgets linked to their areas of functional authority? Or that receiving a 10th of nationally collected revenue they can build long-term institutional capability without “own revenue” from a taxable base, if they have no industry in their areas?
Similarly, do demarcations and the functional borders in our areas reproduce ethno-national boundaries while lacking some administrative-industrial articulation that could make these viable subnational boundaries? What role is there for state-owned entities which might have the capacity and scale economies to deliver in these areas?
South Africa’s political parties are stuck in a VAT-centric timewarp, debating tax rates while the quality of services declines. The budget is not a piggybank to be cracked open or guarded; it is a tool to build a society that works. If parties cannot shift their focus from how much we tax or borrow to how well we spend, election manifestos are rendered obsolete.
The people need more than a debate on the regressivity of VAT. That is moot. They need a government that can fix a pothole. And fast.
Chrispin Phiri is the spokesperson for the department of international relations. Ayabonga Cawe is the chief commissioner at the Trade Administration Commission of South Africa. The authors write in their personal capacities.
Submit and get free exposure here: Showcase Your Business | Advertise Your Special Offers.
