The importance of reducing red tape in South Africa
The reduction of red tape has become an important topic in South Africa. Red tape includes filling out paperwork, obtaining licenses, and having multiple people or committees approve a decision. It also covers various low-level rules that prohibit businesses doing business. Red tape frustrates businesses from getting things done. It wastes time and costs money. It holds back job creation, economic growth and poverty reduction by contributing towards business failure, lost investment, and reduced competitiveness. The benefits of red tape reduction include increased employment opportunities, formalisation of the local economy, improved regulatory supervision, increased compliance with laws and norms, and decreased opportunities for corruption. This is the reason that the Red Tape Reduction Unit of the Western Cape Government (RTRU WCG) seeks to cut red tape. To this end the RTRU WCG has introduced the Mark of Good Public Services (MGPS).
The Mark of Good Public Services (MGPS)
The MGPS was originally developed in 2009 in the Netherlands by Sira Consulting in close cooperation with the Dutch Ministry of Economic Affairs and various municipalities. The MGPS is a proven instrument for municipalities to improve their public service delivery to business. It is designed to improve the business climate and stimulate economic growth, job creation and prosperity. The MGPS can also help lower the operating costs for the municipality and improve governance. Sira Consulting has implemented the MGPS instrument in South Africa in two pilot projects, in Hessequa Local Municipality and Drakenstein Local Municipality.
Improvement is possible
By participating in the MGPS pilot project both municipalities have taken a significant first step to improve their service delivery to businesses. One of the key findings was that improvement is possible. In total 90 improvement measures were identified. These improvement measures are aimed at cutting out unnecessary steps in complex procedures, simplifying rules and regulations in the municipal by-law, simplifying decision making processes, re-designing forms, increasing transparency and availability of information, acknowledging the importance of communication and participation, and increasing the responsiveness of the municipality to the needs of the business community. It is important to note that mostly all of the identified improvement measures are budget-neutral. They will – of course – require time, effort and (political) commitment, but in general they will not tax the already stretched budgets and limited resources of municipalities.
The outcome of implementing improvement measures will be significant
The improvement measures (or variations thereof) that were identified in the MGPS project, will be implemented by Hessequa Local Municipality and Drakenstein Local Municipality. They will remove red tape, reduce unnecessary costs, and speed up processing times. In short, both municipalities will become more effective at solving the problems faced by their local business communities, which can be summarized as: an inability to get things done, high costs of doing business, and long waiting times. It is possible to achieve a reduction of administrative burden of at least 25%. This frees up limited resources that local businesses can use to create jobs. Besides the creation of sustainable local jobs that help to eliminate poverty and reduce inequality, it also initiates a virtuous cycle of growth that will benefit the local and national society.