Changing Centre-Local Relations and the Financing of Urban Development in Secondary Cities: A Comparative Study of Zimbabwe and South Africa

Most urbanisation in developing countries occurs in secondary cities, yet their revenue base is relatively declining. The chapter traces the changing centre-local relations to establish the scope for future development funding in secondary cities. This is important because estimates indicate that if secondary cities were better equipped to steer their economic assets and development, the gross domestic product could double or triple, with a significant developmental impact on their hinterlands. The research design adopted a comparative approach to urban finance in Zimbabwe and South Africa. Data collection was based on literature reviews and key informant interviews. The results show that both countries have been centralising revenue collection and reducing the scope for local finance. This has increased the dependence of secondary cities on intergovernmental transfers at a time when central governments are facing economic challenges. In the future, secondary cities will need to look for alternative sources of revenue, including land value capture and public-private partnerships or concessions.