Optimising Services through an Effective Financial Resource’ Mobilisation Framework in Vhembe District Municipality
South Africa has three tiers of government, namely national, provincial and local. The third tier of government faces a titanic challenge of mobilising financial resources for the collective good of service delivery. This study examines the role of financial resource mobilisation in improving service delivery in municipalities, highlighting their constraints and possibilities. The study outlines the role of municipal council in financial resource mobilisation, which include approval of service delivery plans, budgeting and oversight role using Vhembe district municipalities, located in Limpopo Province, South Africa as a case study. The study graphically makes a comprehensive assessment of the availability of financial resources within all the Vhembe municipalities wherein different kind of grants such as Municipal Infrastructure Grant (MIG) Integrated National Electrification Programme (INEP), Municipal Water Infrastructure Grant (MWIG) and others were identified. The research explores the effectiveness and efficiency of the current financial resources mechanism such as property rates, fees for services (water, refuse removal, electricity), business permits and licenses. It further provides an analysis of opportunities that prevail when implementing effective financial resource mobilisation, such as infrastructure development, investment attraction, employment, and economic growth. The study is underpinned by different theories that include Resource Mobilisation Theory, New Public Management Theory, Resource-Based Theory, Resource Dependency Theory and Human Resource Development Theory. In terms of methodology, the study employed interpretivism, a paradigm that acknowledges subjectivity and interpretation as the primary source of knowledge in business and management, despite the subjective nature of data collection. A qualitative research method was applied wherein the data was analysed using NVIVO thematic analysis. The data have been collected in Vhembe District municipalities, namely Collins Chabane, Makhado, Musina, Thulamela and Vhembe. Purposive sampling was used to select participants from various groups, including political management teams, portfolio heads, senior management, managers, audit committee members, traditional leaders, and members of mayoral forums. The interview guide with questions was used as a data collection instrument. Data have been analysed using thematic analyses and presented using verbatim quotations. The study found that all the municipalities were not self-sufficient since they heavily depended on the mandatory government grants. Accessing other available financial resources and the ability to mobilise extra funding was found to be a major challenge across all the Vhembe municipalities citing various challenges such as the lack of capacity, skills and expertise to develop funding proposals, lack of skills to mobilize financial resources, poor financial management, and weak credit records. It was also found that the grants provided by the government to municipalities are not sufficient due to increasing populations, huge historical service delivery backlog, and high community demands. The study concluded that, while South Africa has abundant financial resources that include government grants, loans, bonds and partnerships, the issue of accessibility remains a challenge. Municipal councils have proven to be struggling in performing their roles to a level where they promote effective mobilisation for service delivery. Furthermore, the study found that the current financial resource mobilisation strategies are not effective hence a need exists for effective strategies that will improve the process of financial resource mobilisation in Vhembe municipalities. Moreover, the study concludes that there are myriad of opportunities presented by the process of financial resources mobilisation. These include investor attraction, access to development initiatives, hard infrastructure development (roads, water, sanitation), revenue generation, job creation, social improvement (health and sports facilities), community development, poverty alleviation, Small Medium and Micro Enterprises (SMME) development, project funding, youth empowerment, power to pay for services, industrial development as well as improvement revenue base. Another conclusion of the study is that the legal and regulatory framework governing financial resource mobilisation affects service delivery in Vhembe municipalities. This is dependent on their effectiveness and efficiency. The recommended financial resource mobilisation strategies include broadening the revenue base, enforcement of credit and debt control policies, digitalisation of tax and rate system, consumer education on the importance of payment of services, strengthening of internal controls, review of policies for financial resource mobilisation, use of technology, improve stakeholder relations, capacity building and the capacitation of revenue management unit. A need to review some of the legislation exist to ensure that they directly respond to the situation of different municipal councils in particular rural ones. The study identified different kind of challenges experienced by municipalities during financial resource mobilisation, which include high dependency on grant, weak financial management systems, poor leadership, corruption, legislative non-compliance, lack of strategic partners, funding conditions, economic uncertainty, poor infrastructure maintenance, migration, municipal debts, and ineffective fiscal framework. It further recommends a customised framework for optimisation of service delivery in Vhembe district municipalities, which will help with effective implementation of financial resource mobilisation in order to promote infrastructure development, municipal service delivery, and socioeconomic progress. The findings of the study suggest that effective financial resource mobilisation framework can optimise service delivery in Vhembe district municipalities. The framework can enhance fiscal stability, improve service delivery, increase investment in infrastructure, diversify revenue streams, foster good governance, improve local economy, attract investors, and improve capacity building.
Financial resources, Framework, Municipality, Resource mobilisation, Service Delivery, Ratepayers, UCTD
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