The Neighbourhood Development Partnership Grant is a conditional grant to municipalities through the Division of Revenue Act (DORA). It is planned to allocate an amount of R10bn over a ten year period for about 100 initiatives.

The NDPG is driven by the notion that public investment and funding can be used creatively to attract private and community investment to unlock the social and economic potential within neglected townships and neighbourhoods and that this in turn will contribute to South Africa’s macro-economic performance and improve quality of life among its citizens.

The key principles forming the foundation of the NDPG are:

• Economic growth is a fundamental prerequisite for achieving other policy objectives including poverty alleviation and improving quality of life.
  
  
• Consequently, government spending on fixed investment should be focused on areas where growth opportunities and economic potential has been identified.
  
  
• This government investment ought to be aimed at attracting private sector investment, stimulating economic activities and creating long term employment opportunities.
  
  
• Government’s efforts to address social inequalities should focus on people, not places. Where localities or areas have little development potential, government spending over and above the provision of basic services, ought to focus on providing social transfers, human resource development and labour market intelligence, thereby enabling those who wish to migrate to localities that are more likely to offer economic opportunities and sustainable employment.
  
  
• Future settlement and economic development opportunities should be channelled into activity corridors and nodes that are adjacent or linked to main growth centres. As such, infrastructure investment and development spending should primarily support localities that are earmarked to become major growth nodes.
  
  

The NDPG has been established with the ultimate objective of leveraging private sector investment in underserved residential neighbourhoods thereby unlocking the social and economic potential within these areas. It is anticipated that this can be achieved by accelerating investment in community amenities in these areas by providing a combination of technical support and capital financing for municipal projects that will leverage private sector investment at scale.

Historically, a number of issues have stood in the way of this type of synergy between public investment and its ability to creatively attract private and community investment. It is hoped that the NDPG will provide a vehicle with which to overcome these barriers.