LU7

Multilevel Government in South Africa (quasi-federalism)

 Themes and Learning Outcomes (LO’s)
Theme 1: General Principles and Concepts Prescribed Material
• LO1: Explain the difference between the divided model of federalism and the integrated model
of federalism
• LO2: Discuss the history behind the quasi-federalism imbedded in the Constitution (1996)
• LO3: Explain the concept of “co-operative government” as applied in the Constitution
• LO4: Explain the concept of “intergovernmental co-ordination” as provided for in the
Constitution and the Intergovernmental Relations Framework Act (13 of 2005)
• LO5: Describe the mechanisms for intergovernmental co-ordination in South Africa

Theme 2: Division of powers between National and Provincial spheres

• LO1: Distinguish legislative powers from executive powers
• LO2: Discuss the structure and objectives of Provincial Government
• LO3: Discuss the division of legislative competencies between the National a Provincial spheres
with reference to decided cases and apply the principles to a given set of facts
• LO4: Discuss the resolution of conflicts over concurrent competencies (Schedule 4)
• LO5: Discuss the resolution of conflicts over exclusive provincial competencies (Schedule 5)
 Themes and Learning Outcomes (LO’s) … more
Theme 3: Division of powers between National and Provincial and Local Government spheres
• LO1: With reference to decided cases, describe the constitutional mandate of local authorities
• LO2: Discuss the role of the Municipal Demarcation Board with reference to decided cases
• LO3 Discuss the three “executive systems” and the two “participatory systems” of municipal government
• LO4: Discuss the powers of the different categories of municipalities
• LO5: Apply principles of decided cases related to the resolution of conflicts between national, provincial and
municipal laws to a given set of facts
• LO6: Discuss the supervision of local government as provided for in the Constitution

Theme 4: Financial Powers

• LO1: Explain the relevance of the division of fiscal powers and the “power of the purse”
• LO2: Discuss the power to collect revenues
• LO3: Discuss the distribution of revenues between the spheres of government
• LO4: Discuss the Public Finance Management Act and the government budgetary processes
• LO5: Discuss the role of the South African Reserve Bank
• LO6: Discuss the government procurement process and the Preferential Procurement Policy Framework
• LO7: Apply principles from decided cases to sets of facts to determine when the courts will invalidate the outcomes of
government tenders or procurement processes
 LO1: Explain the difference between the divided
model of federalism and the integrated model of
federalism
• Federal states include Australia, Brazil, Canada, India, Nigeria, Malaysia,
Pakistan and United States
• For background see https://en.wikipedia.org/wiki/Federalism
• The SA Constitution, 1996 establishes a quasi-federal system of government
o SA federalism is a quite ‘weak’ form of federalism
• It divides power vertically between the legislature, the executive and the
judiciary
• At the same time, it divides power horizontally between the national,
provincial and local spheres of government
• A federal, or quasi-federal, system divides power based on either a divided
model, or an integrated model
LO1: Explain the difference between the divided model of
federalism and the integrated model of federalism … (2)
Divided model:
o Strict division between different levels or spheres
o Each level has exclusive powers and very few, if any, concurrent powers
o Implementation is done by the respective civil services and departments of state

Integrated model:
o Some matters are allocated exclusively to one level or sphere of government
o However, most matters are concurrent
o Implementation is done by provincial or local spheres

• South Africa broadly adheres to an integrated model

• It can be best described as a quasi-federal system
o National government RETAINS more power and influence over law-making and policy formulation than is usual in a fully-fledged
federal system
• Various of the 34 constitutional principles dealt with the structure of government (see text on these)
• Remember 34 Constitutional principles? See Chapters 1 and 2.
• There was a need to ensure that provincial and local government could provide basic services and execute necessary
functions
LO2: Discuss the history behind the quasi-federalism
imbedded in the Constitution (1996)
• Antipathy towards idea of federal state amongst liberation movements
back in 1992-4
• Arguably because of history of apartheid government trying to fragment
SA into ‘self-governing’ and later ‘independent’ ethnic enclaves / states
o With intention of eventually stripping black South Africans of their SA citizenship
• During negotiations however, ANC etc. saw advantages of federal-based
systems when it came to service delivery and political empowerment of
the citizens
o Combining effective regional government with strong central authority
• IFP was all for very strong federal model (Why?)
• Eventually we settled for a quasi-federal system
LO3: Explain the concept of “co-operative government”
as applied in the Constitution
• The principle of co-operative government regulates the overlap of power
• There are mechanisms to regulate the overlap of power between the various
spheres
• All nine provinces have the power to make laws on a wide range of issues
• Schedule 4 of Constitution, 1996 sets out these shared or concurrent matters
o For example, education, the environment, health, housing and policing
• Both national and provincial governments have equal law-making powers on
issues of concurrent matters
• Where National and Provincial laws conflict, National law will override
o If there is a conflict, s 146 comes into effect
• Which details how and when national legislation will override provincial law and legislation
❑ For example where national security so requires
LO3: Explain the concept of “co-operative government”
as applied in the Constitution … (2)
• Provincial government has exclusive power on certain matters (see
Schedule 5)
o For example abattoirs, ambulance services and provincial libraries
• Local government has authority to make by-laws for effective
administration on certain matters (in both Schedule 4 and 5)
• National government has power to make laws on any matter not
mentioned in schedules 4 and 5
• Chapter 3 of the Constitution makes provision for the management of
any potential conflict
o Chapter 3 sets out the Principles of Co-operative government
LO3: Explain the concept of “co-operative government”
as applied in the Constitution … (3)
• All spheres are to observe and adhere to this principle of co-operative
government
• The spheres are to approach the courts as a measure of last resort
• Langeberg-case: This principle does not apply to Chapter 9 institutions
o IEC is an organ of state in the constitutional sense
o However, IEC is NOT an organ of state in the National sphere of government
o Chapter 9 entrenches independence of Chapter 9 institutions
• Uthukela-case: CC confirmed that municipalities ARE organs of state in the
local level and National ministers and the President are organs of state at the
National level
• The courts will not interfere in intergovernmental disputes unless reasonable
effort was made to resolve the issues at an administrative and / or political
level
LO4: Explain the concept of “intergovernmental co-ordination” as
provided for in the Constitution and the Intergovernmental Relations
Framework Act (13 of 2005)
• NB to distinguish between LEGISLATIVE and EXECUTIVE functions
• The Act establishes structures to promote and facilitate intergovernmental relations and mechanisms to settle disputes
• Provisions do not apply to conflicts between national and provincial legislatures (section 146 only)
• Responsibility for co-ordinating legislative activities of the different spheres of government has been vested
in the NCOP
o Co-ordinating bodies are established to determine the legislative and executive activities of the three spheres of
government
o Why the NCOP? - Discuss
• Executive functions / conflicts are mediated by bodies established in terms of the Intergovernmental
Relations Framework Act (IGRFA)
o Intergovernmental co-ordinating bodies are established to avoid conflicts in particular relating to executive functions
o Implementation of legislation and policies
• Examples are President’s Co-ordinating Council, National Intergovernmental Forums and the Premier’s
Intergovernmental Forum
• Also see Chapter 3 of the Constitution, 1996
o Chapter 3 deals exclusively with the idea of ‘co-operative government’
• The courts, and Chapter 9 institutions, are not bound to these provisions
• Why not? Discuss
LO5: Describe the mechanisms for intergovernmental
co-ordination in South Africa
The Intergovernmental Relations Framework Act 13 of 2005 provides various steps that need
to be taken to resolve disputes (especially relating to EXECUTIVE functions):
• Parties must try to settle dispute through direct negotiations
o Or through intermediary
• If not successful, then one party may declare a formal intergovernmental dispute by letting
other party know
• Parties then obliged to convene meeting where precise issue is delineated and also agree on
mechanisms and procedures, other than judicial proceedings
• If a meeting is not convened then Minister responsible for provincial and / or local
government (as appropriate) must convene the meeting
• The Act assigns specific responsibilities to the facilitator appointed
• Attempts and contents reports are considered privileged and may not be used in judicial
proceedings unless it has been declared formal intergovernmental dispute and efforts to
settle the dispute have proved unsuccessful
Principles related to resolution of conflicts between
national, provincial and municipal laws:
1. Does the central legislature have the legislative competence to pass
its law?
2. Does the provincial legislative have the competence to pass its law?
3. If both legislatures have the legal competence to pass the laws,
then the issue would be whether the different laws can be
reconciled
4. If there is an irreconcilable conflict, then the central law will prevail
if the provisions of section 146 of the Constitution are satisfied
5. If provisions of section 146 are not met, then the provincial law will
prevail
LO1: Distinguish legislative powers from executive powers
• To a large degree, provincial executives have authority over the same
subject matter as provincial legislatures
• Provinces provide a link closer to the citizens - to ensure government
addresses the unique needs of discrete geographical areas
• Provincial executives are required to implement national policies and
plans on important areas such as health, education, etc
• Provincial executives ensure the smooth running of local government
• The legislative powers of each province are vested in the provincial
legislatures which:
o May pass a provincial Constitution
o May pass on any matter within a functional area listed in Schedules 4 and 5
o May pass on matters ‘expressly assigned’ by national legislation
 LO1: Distinguish legislative powers from executive
powers … (2)
o Any matter for which the Constitution envisages
o May also assign some powers to a municipality in that province
o May change the province’s name (two-thirds majority)
• Executive authority is vested in the Premier
o The role mirrors that of the President at national level (but does not enjoy Head of
State powers)
o The Premier exercises executive authority with other members of the executive
council
o Implements provincial legislation in the province (see generally section 125)
o Has executive authority in matters listed in schedules 4 and 5, to the extent of
administrative capacity
o Implements national legislation in and outside of functional areas and as required
in terms of Schedules 4 & 5
 LO2: Discuss the structure and objectives of
Provincial Government
• Nine provinces are required to fulfil THREE interrelated functions:
o Provide close link between voters and their government
o Implement National plans, policies and service delivery objectives
• Viz. housing, health, policing and education
o Oversee smooth running of local (municipal) government within the boundaries of
that province
• Legislative authority of each province is vested in its provincial legislature
o Functional areas: - Schedules 4 &5, or ‘expressly assigned’ by national legislation or
where C. ‘envisages’ the enactment of provincial legislation
• Also: Provincial legislation reasonably necessary for, or incidental to, the
effective exercise of a power concerning any matter listed in Schedule 4 is
to all intents & purposes legislation with regard to a matter listed in
Schedule 4
LO3: Discuss the division of legislative competencies between the
National a Provincial spheres with reference to decided cases and
apply the principles to a given set of facts
• Parliament’s power may overlap with powers bestowed on provincial legislatures
o With concurrent competences (schedule 4)
Both national and provincial legislatures have powers:
• If both pass a law, the law is valid
• If there is a direct conflict:
o Provisions of the provincial legislature will prevail, or if one or more requirements of s 146 is
met, provisions of the national legislature will prevail
o Only provinces can pass on schedule 5 matters, unless section 44(2) applies,
• E.g. to maintain national security
• When there is uncertainty on authority to pass legislation, two questions must be
answered:
o Does the legislation deal with a topic listed in schedules 4 or 5?
o If yes, did the relevant legislature have authority in terms of section 44(2) or s 146?
• Main substance and character of the legislation determines field of competence
LO3: Discuss the division of legislative competencies between the
National a Provincial spheres with reference to decided cases and
apply the principles to a given set of facts … (2)
• Liquor Bill-case: National legislature passed the Liquor Bill which sought to
regulate comprehensively the liquor industry. Retail sales were to be
treated as provincial issue. Bill provided detailed mechanisms as to how
provincial legislatures should establish their retail licensing systems.
o Western Cape objected, arguing Bill relegated provinces to role of funders and
administrators
o National argued Bill dealt with trade issues (= concurrent competence)
o Western Cape argued Bill dealt with liquor licences (= exclusive competence)
• CC found that part of the Bill regulating manufacture and distribution of
liquor constitutional, but that part dealing with the retailing of liquor
unconstitutional
o Ie agreed with Western Cape argument
LO3: Discuss the division of legislative competencies between the
National a Provincial spheres with reference to decided cases and
apply the principles to a given set of facts … (3)
• Premier: Limpopo Province-case: Was financial management of a provincial
legislature a functional area within province’s competence (not being listed as
such in either Schedule 4 or 5)?
o Argument #1: Yes it is because the power to pass legislation regulating financial
management of a provincial legislature had been ‘expressly assigned’ to the province by the
Financial Management of Parliament Act 10 of 2009
o Argument #2: The power to pass such legislation had been ‘envisaged’ by sections 195, 215
and 216 of the Constitution, 1996
• Constitutional Court majority rejected BOTH arguments. The Bill did NOT fall into
legislative competence of Provincial Legislature as did not clearly meet
requirements:
o Was a functional area listed in Schedules 4 and 5
o Was a matter ‘expressly assigned’ by national legislation
o Was a matter for which the Constitution clearly envisaged provincial competence
LO3: Discuss the division of legislative competencies between the
National a Provincial spheres with reference to decided cases and
apply the principles to a given set of facts … (4)

Abahalali Basemjondolo-case: Was preventing residents from erecting

informal housing in substance a land issue (in which case it would fall to be
dealt with a the national level) or was it substantially a housing issue?
CC: It was a housing issue and therefore to be dealt with and within the
competence of the KZN Provincial Legislature
 LO4: Discuss the resolution of conflicts over
concurrent competencies (Schedule 4)
• Conflicts that are related to concurrent competences
• If both legislatures have competence, can the different laws be
reconciled?
• If not, then national law will prevail, provided section 146 is satisfied.
• If section 146 is not satisfied, provincial legislation will prevail
• Section 146:
o If matter cannot be regulated effectively by provinces individually
o If matter requires uniformity across the nation for effectiveness
o If necessary for national security, economic unity, equality
 LO4: Discuss the resolution of conflicts over
concurrent competencies (Schedule 4) … (2)
Conflicts relating to exclusive provincial competence: Section 44(2): national
Parliament may intervene in areas of exclusive provincial competence provided:
o It is to maintain national security
o It is to maintain economic unity
o It is to maintain essential national standards
o It is to establish minimum standards required for the rendering of services
o It is to prevent unreasonable action taken by a province
• Read section 147(2)!
o ‘National legislation referred to in section 44(2) [‘national security’ etc.] prevails over
provincial legislation in respect of matters within the functional areas listed in Schedule 5’
• Mashavha-case: To achieve equity and effectiveness, it was necessary to set
minimum standards nationally for the administration of the Social Assistance
Act. Some provinces rich, others poorer, for example. Consequently, to prevent
inequality and unfairness in the provision of social assistance, uniform systems
had to be in place throughout SA.
 LO5: Discuss the resolution of conflicts over
exclusive provincial competencies (Schedule 5)
• Section 44(2) of C. – National Parliament may intervene even in Schedule 5
competencies to:
o Maintain national security
o Maintain economic unity
o Maintain essential national standards
o Establish minimum standards
o Prevent unreasonable action prejudicial to other provinces or country
• If Parliament intervenes in Schedule 5 matter, any conflicts arising must be
resolved in terms of section 147(2)
o National legislation prevails over provincial legislation
Theme 3: Learning Outcomes
Theme 3: Division of powers between National and Provincial and Local
Government spheres
• LO1: With reference to decided cases, describe the constitutional mandate of
local authorities
• LO2: Discuss the role of the Municipal Demarcation Board with reference to
decided cases
• LO3 Discuss the three “executive systems” and the two “participatory systems” of
municipal government
• LO4: Discuss the powers of the different categories of municipalities
• LO5: Apply principles of decided cases related to the resolution of conflicts
between national, provincial and municipal laws to a given set of facts
• LO6: Discuss the supervision of local government as provided for in the
Constitution
 LO1: With reference to decided cases, describe the
constitutional mandate of local authorities
• Local government
• S 152 sets out the objectives of local government
o E.g. to provide democratic and accountable government, a healthy environment and promote social
and economic development
• In addition, they must prioritise the basic needs of the community
• Promote social and economic development of the community
• Participate in the national and provincial development programmes
• Joseph-case: one of the most important objectives of local government is to meet the
basic needs of all the inhabitants of SA
o CC: Sections 152 and 153 of the C., read together with the Local Government: Municipal Systems
Act 32 of 2000, impose an obligation on every municipality to provide municipal services (water,
electricity) to their inhabitants irrespective of whether they have entered into a contract for the
supply of these services with the municipality.
• These days (otherwise than pre-1994) a municipality is ‘not a mere creature of statute
otherwise moribund save if imbued with power by provincial or national legislation – a
municipality now enjoys ORIGINAL and constitutionally entrenched powers, duties,
rights and functions that may only be constrained by law as far as the C. permits’
Section 155: Municipalities now divided
into categories A,B and C
• A = Metropolitan (City of Cape Town)
• B = Local (e.g. Breede Valley)
• C = District (Cape Winelands)
Creative Commons (CC BY-SA 3.0)
 LO1: With reference to decided cases, describe the
constitutional mandate of local authorities … (2)
• Municipalities are no longer creatures of statute, the Constitution also gives
powers
o Section 156 sets out powers
o Original powers, assigned powers and incidental powers
• Original powers: Powers directly from the Constitution
o E.g. A municipality has the executive authority to administer: Local government matters
listed in Parts B of both Schedules 4 & 5; and
• Any other matter assigned to it by national or provincial legislation
• Municipality has the right to exercise any power concerning a matter reasonably
necessary or incidental to the effective performance of its functions
• Gauteng Development Tribunal-case: Consequence of section 155(7) is neither
national nor provincial spheres may legislate to give themselves the power to
exercise executive municipal power etc.
o The may REGULATE and LEGISLATE w.r.t. local government matters, yes, but NOT
themselves administer or implement such laws
 LO2: Discuss the role of the Municipal Demarcation
Board with reference to decided cases
• The power to determine whether an area satisfies criteria and should therefore
be classified as a metropolitan area with a metropolitan municipality is vested
in an independent body known as the Municipal Demarcation Board
• Section 155(3)(b) of C. says that national legislation must establish criteria and
procedures for the determination of municipal boundaries by an independent
authority
• And that is the Municipal Demarcation Board (MDB)
• In terms of the Local Government: Municipal Demarcation Act
• Matatiele Municipality-case:
o In 2005 Parliament passed Act altering boundary between KZN and Easter Cape
o Applicants argued that change was unconstitutional as it violated section 155(3)(b)
o New boundaries had been determined by Parliament and not by independent MDB
o CC obiter: ‘If municipalities were established along political lines or with political
interference, it will undermine system of multiparty democratic government’
o Could amount to gerrymandering, for example
LO3 Discuss the three “executive systems” and the two
“participatory systems” of municipal government
• Different types of municipalities my be established within each category of
municipality
• Three ‘executive systems’ and two ‘participatory systems’ of municipal
government are distinguished
Executive:
1. Collective executive system → executive committee
2. Mayoral executive system → executive mayor + mayoral committee
3. Plenary executive committee → municipal council itself
Participatory:
1. Sub-council participatory system → delegated powers exercised by sub-councils
2. Ward participatory system → matters of local concern to wards are dealt with
by ward committees
LO4: Discuss the powers of the different categories
of municipalities
See slide to LO1 above …
• Original powers: Powers directly from the Constitution
o E.g. A municipality has the executive authority to administer: Local government matters listed
in Parts B of both Schedules 4 & 5; and
• Any other matter assigned to it by national or provincial legislation
• Municipality has the right to exercise any power concerning a matter reasonably
necessary or incidental to the effective performance of its functions
• Gauteng Development Tribunal-case: Consequence of section 155(7) is neither
national nor provincial spheres may legislate to give themselves the power to
exercise executive municipal power etc.
o The may REGULATE and LEGISLATE w.r.t. local government matters, yes, but NOT themselves
administer or implement such laws
LO5: Apply principles of decided cases related to the resolution of
conflicts between national, provincial and municipal laws to a given set
of facts
• Parliament, provinces and local government may all legislate on Schedule 4 & 5
matters
o Therefore conflicts will arise
• Section 156(3) deals with conflicts of legislation at this level
• Subject to section 151(4), any by-law that conflicts with national or provincial law
is invalid
• Consequently, a municipality must exercise its legislative and executive authority
within the parameters set by national or provincial legislation
o However, in terms of Schedule 4B, municipalities have original legislative and executive
authority in certain areas
o Local government power will therefore prevail in those areas
• National and provincial spheres have a supervisory role over local government
o Must monitor, support, regulate and intervene in local government
LO6: Discuss the supervision of local government as provided for in
the Constitution
• The manner in which local government exercises its legislative and executive powers must be
supervised by the national and provincial spheres
• These are divided into four categories, viz. the power to …
1. Monitor – section 155(6) – provincial governments must promote development of local
government, develop capacity, ‘observe’ and ‘keep under review’
2. Support – section 154(1) – both national and provincial governments must support and
strengthen capacity of municipalities to manage their affairs and exercise powers & functions
3. Regulate – section 155(7) – both national and provincial governments have legislative and
executive authority to see to effective performance by municipalities in respect of Schedule 4
& 5 functions
o The must control, yes, but NOT exercise municipal power or perform municipal functions
4. Intervene in local government
• Section 139(1) – regular intervention – provincial executive may intervene to ensure fulfilment of municipal
obligation
• Section 139(4) – budgetary intervention – w.r.t. budget or revenue-raising measures
• Section 139(5) – financial crisis interventions – e.g. dissolve council / implement recovery plan
• First Certification-case: The power to intervene does give the provincial government the authority to
intrude on the functional terrain of local government
• Gives it ‘hands-on’ power
Theme 4: Learning Outcomes

Theme 4: Financial Powers

• LO1: Explain the relevance of the division of fiscal powers and the “power of the purse”
• LO2: Discuss the power to collect revenues
• LO3: Discuss the distribution of revenues between the spheres of government
• LO4: Discuss the Public Finance Management Act and the government budgetary
processes
• LO5: Discuss the role of the South African Reserve Bank
• LO6: Discuss the government procurement process and the Preferential Procurement
Policy Framework
• LO7: Apply principles from decided cases to sets of facts to determine when the courts
will invalidate the outcomes of government tenders or procurement processes
 LO1: Explain the relevance of the division of fiscal
powers and the ‘power of the purse’
• Three questions:
o Should power to raise revenue be distributed across different spheres of
government?
o If power to impose taxes is centralised, how does distribution to other spheres take
place?
o How, and on what basis, does division between different spheres take place?
• Murray and Simeon argue that: … ‘Fiscal federalism … division of revenues
and expenditures among central and provincial governments, may say as
much, if not more, about how power and influence are distributed than the
constitutional text itself.’
• ‘Constitutional competencies are meaningless without an accompanying
fiscal competence. Financial sticks and carrots in a centralized financial
system give the centre power to influence provincial actions and priorities
well beyond the formal allocation of authority.’
LO2: Discuss the power to collect revenues
• Chapter 13 of the Constitution sets this out
o The power to collect revenue is primarily vested in the national sphere
• Section 228(1) - Provinces:
o The provincial sphere may have power if regulated by an Act of Parliament
• Section 229(1) - Municipalities may:
o Impose rates on properties, and fees for services provided
o Impose other taxes, levies, etc. if authorised by an Act of Parliament
• Like provincial legislatures, however, municipalities may not impose
income tax, value-added tax, general sales tax or customs duty
o This is for the national sphere only
• Consult prescribed text for more
 LO3: Discuss the distribution of revenues between
the spheres of government
• Section 214 of the C. provides that an Act of Parliament must provide for:
o Equitable division of revenue raised between the national, provincial and local spheres
o Determination of each province’s equitable share of the revenue
o Any other allocations to different spheres / levels of government from national government’s revenue
• To do this, the annual Division of Revenue Act (DORA) is promulgated
• Section 214 of Constitution: DORA may be passed only once the provincial governments,
local government and the Fiscal and Financial Commission (FFC) have been consulted
o Provincial and local spheres have the right to an equitable share of revenue collected nationally
o The Fiscal and Financial Commission must provide recommendations on an equitable division of
revenue
o The budgetary processes must promote transparency, accountability and effective management
• Read section 214(2) of the C. for additional factors that are to be taken into account
 LO4: Discuss the Public Finance Management
Act and the government budgetary processes
• Section 215(1) of the Constitution provides that the national, provincial and municipal budgetary
processes must promote transparency, accountability and the effective financial management of the
economy, debt and the public sector
• The Public Finance Management Act (PFMA) deals with public finance
• The Minister of Finance must table the annual budget for the financial year before the start of that
financial year
o Budget must, inter alia, provide estimates of all expected revenue and of all current expenditures for that financial year
• The PFMA also establishes national and provincial treasuries
• In terms of section 11 of the PFMA, the National Treasury is also in charge of the National Revenue Fund
o National Revenue Fund is established in terms of section 215 of the Constitution
o NRF promotes, inter alia, national government’s fiscal policy framework and co-ordinates macro-economic policies
• Provincial treasuries are headed by MEC for Finance in the province
• They prepare a provincial budget and exercise control over the implementation of the provincial budget
• Consult prescribed text for more
LO5: Discuss the role of the South African Reserve Bank
• Section 223 of the Constitution, 1996 also provides for the establishment of SA’s
central bank the Reserve Bank
• Regulated by the South African Reserve Bank Act 90 of 1989
• Section 224(2) of C:
o … primary objective of the SARB is to protect the value of the currency in the interest of balanced
and sustainable economic growth
o also provides that the bank must operate independently and without fear, favour or prejudice, but
must consult regularly with the Minister of Finance
• SARB plays a key-role in the management of money (esp. money supply) and the
banking system
• Role can be described as follows:
o Formulation and implementation of monetary policy
• E.g. by setting interest rates
• Contrast this with Minister of Finance who determines FISCAL policy [Discuss]
o Provision of liquidity to banks
o Bank notes and coins
o Banker to the banks
LO6: Discuss the government procurement process
and the Preferential Procurement Policy Framework
• Section 217 of C. makes it imperative for organs of state in the
national, provincial or local spheres to contract for goods and services
in a manner that is fair, equitable, transparent, competitive and cost-
effective
o However, may provide for persons or categories of persons previously
disadvantaged
o The Preferential Procurement Policy Framework Act (PPPFA) is the
empowering legislation that makes this possible
 LO7: Apply principles from decided cases to sets of facts to
determine when the courts will invalidate the outcomes of
government tenders or procurement processes
• Section 217 C. requires that organ of state at all levels contract for goods &
services in a manner that is fair, equitable, transparent, competitive and cost-
effective
• May also make provision for person disadvantaged by unfair discrimination
• Millennium Waste Management-case – SCA required tenders to be evaluate
that advances the five constitutional values identified in section 217 of the C.
o See TB page 311 for facts
• In this case, the CC also found that condonation of non-compliance with the
administrative requirements of the tender process would have been in the
public interest and have served the broader constitutional values of fairness,
competitiveness and cost-effectiveness
o Constitutional values must be the prism through which the enabling legislation must be
interpreted
 LO7: Apply principles from decided cases to sets of facts to
determine when the courts will invalidate the outcomes of
government tenders or procurement processes … (2)
• Minister of Social Development-case: Section 2017’s principles of
fairness, equitable treatment, transparency, competitiveness and cost-
effectiveness must inform all aspects of the tender process that led to
the appellants being denied the tender
o See textbook page 312-3 for facts of the case
• Against principles of fairness for tender processes to be evaluated
against uncertain criteria:
o A process that prefers form over substance could facilitate corruption by
providing excuse not to consider meritorious tenders and by excluding them on
technicalities
o Can be inimical to fairness, competitiveness and cost-effectiveness
o Formalities are fine, provided requirements are made clear and consequences of
non-compliance clearly spelt out