Fiscal decentralization and the devolution of powers to the lowers tiers of government in South
Africa can be understood in the context of the 1996 Constitution of the Republic of South
Africa. This Constitution divides the country into three spheres of government, namely (i) the
national government; (ii) the nine provincial governments; and (iii) the 284 local governments/
municipalities (SA Constitution 1996).While these spheres are “distinctive, interdependent, and
interrelated” in terms of section 40(1) of the Constitution, they operate through a bifurcated
structure of government, establishing direct relations and responsibilities between the
national government and provinces, on one hand, and between the national government and
the local governments on the other (ibid). This resulted in the creation of two separate spheres
of sub-national governments in South Africa, namely provincial and local government.
The national government consists of all national government departments and other
parastatals bodies, forming what is commonly known as consolidated national government. Its central
priority is to provide basic services to all South Africans, within the constraint of available
resources, as set out in Chapter 2 of the Constitution’s Bill of Rights. These rights include: freedom
of movement; a protected environment that is not harmful to health and well-being; housing;
health care; food; water and sanitation; social security, and education. These responsibilities are
shared among spheres of government in terms of the principles of devolution and decentralization.
This means that, while the national government has overall powers in the management of
national affairs, provincial and local governments are responsible for the provision of basic services