| RIGFA -
the Review of Intergovernmental Financing Arrangements
Background
In late 2001,
the National Executive Council determined that NEFC should review
the system of financial grants and transfers
from the National Government to Provincial and Local-Level Governments.
NEFC is undertaking a broad analysis of the whole system, focusing on:
- fiscal
affordability
- funding-related
causes of service delivery
deterioration
- collating
better information about Provincial and Local-Level Government
fiscal performance, needs and administrative capacity.
In May 2003
the RIGFA
Interim Report
was released. The report made some initial findings
and observations about the current system of fiscal decentralisation.
The Interim Report contained proposals for short term reforms
to the current system, while the NEFC finalises proposals for a more
permanent system.
An
overview of the RIGFA
RIGFA is mostly about answering 2 questions:
- First, how much should
Provinces and LLGs get from the nation's total revenues?
- Secondly , how should
we divide this share up among the Provinces and LLGs?
The NEFC is taking six key steps to answer these questions:
Step
1: Find out what provinces are responsible for funding
Step 2:
Determine what those responsibilities cost
Step 3:
Estimate how much revenue provinces have the capacity to raise on
their own to pay for these responsibilities
Step
4: Determine if provinces can raise more revenue
Step
5: Should more (or less) of the national resource envelope be
given to provinces?
RIGFA/Department
of Treasury activity: Splitting
total resources between National, Provincial and Local-Level
governments
Step
6: How should the provincial share be divided between provinces?
RIGFA
Activity: Designing intergovernmental
grants and transfers
The
Commission intends to put forward options and directions for
reform of the current system over the course of 2005.
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