Abstract
Infrastructure development and the provision of affordable housing are paramount components in South Africa's pursuit of long-term economic goals. To advance these objectives, the Department of Human Settlements introduced the Urban Settlement Development Grant (USDG) as an additional financial allocation to bolster metropolitan municipalities' revenue bases to promote infrastructure projects. However, achieving success in this endeavour has posed a formidable challenge for metropolitan municipalities.
This study seeks to assess the role of the USDG in contributing to South Africa's infrastructure development and to propose remedies for the challenges encountered in addressing infrastructure backlogs. This research employs a mixed method (qualitative and quantitative) research approach, incorporating data collection through open-ended questionnaires and examining historical financial and non-financial performance reports from various levels of government.
The findings from this study reveals that the Urban Settlement Development Grant has not effectively fulfilled its intended objectives of leveraging metropolitan municipalities' revenue capital for financing infrastructure projects. This suboptimal performance is primarily attributed to the prevalence of suboptimal policies, irregularities in USDG expenditures, and deficiencies in financial administration. The insights gained from this study have the potential to facilitate necessary improvements to the USDG program, ensuring its more effective contribution to South Africa's infrastructure development agenda.