Urban regeneration needed to come from development programmes that did not require large subsidies from the state to be viable. Continuing to fund development projects at the level that was currently taking place was not sustainable, finance minister, Pravin Gordhan told delegates at the KwaZulu-Natal Institute for Architecture at the Durban City Hall today (July 8).

His keynote address pulled no punches as he challenged both urban planning reforms and the need for new financing strategies that did not rely on grants and subsidies. Only this would introduce meaningful change in the medium term, he said.

He told delegates that the national treasury was already working with metropolitan municipalities which were able to borrow larger amounts in order to ensure that they borrowed wisely and did not rely on the fiscus.

He also highlighted the need for public private sector partnerships more than once and said his department was looking for new ideas on how to finance infrastructure projects. “It is important to (create) a culture of co-operation between the public and private sector and one of trust when it comes to sharing resources between the public and private sectors.”

Gordhan said there was a need for economic regeneration or strategic change and pointed out that the architectural profession could play an important part in auctioning this and righting the wrongs of the past. This included designing cities “upwards instead of outwards” in order to do away with the expensive transport that was impacting on the poor and vulnerable who were travelling unacceptably long distances to work or to seek job opportunities.

He admitted that the country was in need of structural reforms which would take the economy in a different direction.

Referring to the recently released International Monetary Fund (IMF) report which put expected growth for South Africa at just 0.1%, he noted that the Treasury was “more optimistic” but added that this needed to be around 3% for meaningful growth and to ensure people’s wellbeing.

However, he said that strategic reform and targeted government interventions would be guided by the National Development Plan and the President’s state of the nation address.

Key aspects would include fiscal reform, labour issues, infrastructure, bank and capital markets and market regulation amongst others.

Gordhan added that the spatial revolution that was a theme of the conference was integral to growth in South Africa. He said this had been identified by the IMF as one of the strategic reforms that were necessary in both South Africa and other parts of the world.

He noted that restructuring also required revitalisation of agriculture and agri processing, advancement of beneficiation rather than reliance on exports of raw material and mining. It was also ultra important to re-industrialise the country.

He pointed out that cities needed to provide facilities to support entrepreneurship.

Private investment was “a huge requirement” going forward but, given both the local and global economies, investors were risk averse and were pursuing short term yields, he noted.

According to Gordhan, it is critical to unlock the potential of SMMEs and, in particular township and rural entrepreneurs as well as implement strategic reforms and boost state owned enterprises and roll out broad band, water and sanitation and transport infrastructure.

“The challenge is not to re-invent the NDP but to be decisive about what we should stop doing,” he said, challenging conference delegates to provide him with a list of do’s and don’ts at the conclusion of the conference.

His own list included avoiding opportunists whose development agendas did not follow the broader plans of cities and, instead,  to implement a vision that enabled people to experience spatial revolution as being of benefit to them.

He stressed that it was important to manage relationships between politicians and elites so that citizens do not feel disempowered and can be confident that those representing them would act in their best interests and not just certain sectors.

He said that government was looking at addressing the process of regulatory approval for projects which was currently protracted and a major headache for investors as well as catalytic projects and infrastructure projects that would foster growth.

There needed to be less of a burden on the poor and vulnerable and secure tenure and access to housing opportunities. Municipalities must ensure good land use management and that development controls are modernised. Already, various government departments were working towards a new era of spatial planning and land use management in South Africa, he noted.