2024/25 Submission for the Division of Revenue

The theme of this Submission is “The Intergovernmental Fiscal Relations System and Rural Development in South Africa”, reflecting the demographic, economic and political importance of rural areas. The aim is to provide a comprehensive review of the intergovernmental fiscal relations (IGFR) instruments, and their reform for more effective rural growth and development. Rural development is a complex process and, therefore, requires proper coordination among the institutions and departments involved.
In South Africa, rural areas account for 80% of the land and are home to 38% of the population. Rural areas lag behind the country as a whole on economic performance indicators, such as economic growth, labour force participation rates, unemployment, education attainment and life expectancy at birth. Challenges include insufficient skills and educational performance, socio-spatial inequalities, infrastructure deficits, housing backlogs, environmental issues and health disparities. The agriculture sector contributes less than 3% to South Africa’s economy, and so rural development is clearly not just about agricultural development. Addressing the challenges facing the rural poor requires more than agricultural and agrarian reforms, and must include education and health care outcomes, social and economic infrastructure, the creation of employment opportunities as well as changing the economic geography of rural areas.
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