Most of our municipalities are in a devastating state. Of the 257 municipalities in South Africa, only 13% achieved a clean audit in 2024. In addition, only 34% were regarded by the National Treasury as not being in ‘financial distress’.
When President Cyril Ramaphosa delivered his State of the Nation Address (Sona) on 6 February 2025, his major focus was on the need to reform our local government system in an effort to save our municipalities.
More recently, Finance Minister Enoch Godongwana in the Budget speech delivered on 12 March 2025, reiterated the need to strengthen local government by implementing critical institutional, governance and management changes to create an enabling environment for long-term investment.
It is well known that most of our municipalities are in a devastating state. Of the 257 municipalities in this country, only 13% achieved a clean audit last year. In addition, only 34% were regarded by the National Treasury as not being in “financial distress”.
What is clear is that municipalities in this country cannot be saved by minor amendments to the way that they operate. If they are not fundamentally reformed, the existing problems will continue.
These problems include the failure to deliver basic services such as water and sanitation, electricity, roads and waste collection. These basic service delivery failures have a huge negative impact on growth and investment.
A good indication of the financial crisis faced by municipalities is that according to Minister of Cooperative Governance and Traditional Affairs, Velenkosini Hlabisa, an amount of more than R107-billion is owed by municipalities to Eskom and water boards. In April 2025, he went further and described the system of local government being “in crisis”.
Operation Vulindlela is a joint initiative between the Presidency and the National Treasury, and is constructively involved in the steps needed to save South Africa. The five steps that I set out below to reform local government have also been supported by Operation Vulindlela.
1 Abolish the two-tier system and reduce the number of municipalities
Currently South Africa has eight metropolitan municipalities, 205 local municipalities and 44 district municipalities. A two-tier system exists throughout the country, except in the areas governed by the eight metropolitan municipalities.
Each local municipality needs to be assessed in terms of its ability to fulfil its municipal obligations and adequately provide essential municipal services. Very few local municipalities will pass that test. To do so, they need to have received clean audits, and to have good track records. Two examples of such local municipalities are Drakenstein (Paarl) and Bitou (Plettenberg Bay). Those two do not require any coordinating assistance from their district councils.
Once all the local municipalities have been assessed, those that have passed the strict test should be allowed to continue to exist as standalone municipalities, in the same way as the eight metropolitan municipalities.
The remaining local municipalities, all with very poor track records, should be disbanded and combined into the existing district councils. These new, far larger municipalities would then become de facto local municipalities. They would have the same powers as the other local municipalities and the current metropolitan municipalities.
The net effect of this change would be to reduce the number of municipalities from 257 to well under 100.
One of the major problems faced by local municipalities is that they do not have employees with the necessary skills or experience. Combining them in the manner that I have proposed will provide a far higher chance of securing the necessary skills and experience. There would also be a significant saving of money as the number of councilors and employees would be reduced significantly.
That would unfortunately lead to job losses, but those affected would largely be people who have been paid fees as councilors for little or no work; or, in the case of municipal staff, those losing their jobs would largely be cadre deployees (an issue I address below).
Each new municipality would now have significant resources. They would be able to receive the equitable share of all the municipalities that have combined into one. Similarly, they would receive a higher income via rates and the sale of electricity and water from the residents in all the combined municipalities. Subject to what is said below, they would all be in a far better position to deliver viable services than the existing local municipalities.
2 New governance system to avoid coalitions
Most local coalition governments in South Africa have been a complete disaster for municipalities, and have triggered weakened service delivery to the prejudice of all constituents.
A good example has been Johannesburg, which has headed downhill over a number of years, and has suffered under arguably the two most inept mayors in the country. Both have come from the miniscule party, Al-Jamah. That has only happened as the irrational outcome of the various coalition agreements.
The need for coalitions can be completely avoided. If one party receives more than 50% of the seats in a local council then that one party can govern on its own. In such a situation, it could then appoint the executive mayor who would naturally come from the majority party.
But the problem arises when no party achieves an overall majority. That is when they try to organise coalitions, and the coalition agreements regularly break down.
The Local Government: Municipal Structures Act, 1998 contemplates two governance systems in municipalities, namely the executive mayoral system and the collective executive system. While the executive mayoral system makes sense where one party has a majority, the collective executive system should apply where no party has an overall majority.
Under the collective executive system, the mayor merely plays a celebratory role. The larger political parties are then represented on a pro rata basis on the collective executive. That then brings them together to govern the municipality. It also means that the very small parties, like Al-Jamah, have no role in the governance of the municipalities.
The collective executive system should therefore be mandatory when there is no single majority party. In addition, it should be mandatory for the largest party to appoint the mayor. That would remove any need for coalition governance.
3 Job requirements for senior employees
One of the problems faced by many municipalities is that their senior staff lack the skills or experience needed to lead their administrations. We need a Public Service Commission to oversee the appointments of senior staff in order to ensure that minimum requirements are met.
For example, the head of finance in any municipality should be someone who has a university degree in financial studies and ideally should qualify as a chartered accountant. Given the significant budgets of municipalities, no one with less experience and lower qualifications should be allowed to head any municipality’s financial role.
It would be far easier for the Public Service Commission to play an active role if there were fewer than 100 municipalities in the country, rather than the current 257. It would then be able to ensure that all the senior staff met the requirements that it determined on a regulatory basis.
4 The end of cadre deployment
Cadre deployment has been a major factor in destroying our municipalities, leading to the appointment of people who are corrupt and/or inept. They are appointed on the basis of their loyalty to the relevant political party, or on the basis of family links, and in most cases they do not have the skills or experience required.
Cadre deployment affects each function of local government; it facilitates an enabling environment for the misappropriation of public funds and ineffective public procurement without proper checks and balances for wasted expenditure.
I have previously written extensively about cadre deployment (Cadre deployment sends us headlong towards kakistocracy). As I pointed out in that article, cadre deployment is patently illegal and infringes the provisions of our Constitution.
However, that view is not accepted by our government, right up to the level of our president, Cyril Ramaphosa. On a number of occasions, such as in the Zondo Commission, Ramaphosa has vigorously defended the validity of cadre deployment, as has the chair of the ANC, Gwede Mantashe.
Given their stance, it is necessary for legislation to be passed making cadre deployment illegal. Any appointment made on a cadre deployment basis should be a criminal offence, exposing the guilty person(s) to potential imprisonment.
If that legislation was introduced, it would have a hugely constructive role throughout the country, not only at a local government level, but also in provincial government, national government and in the state-owned enterprises. In turn, that would play a role in stopping corruption and avoiding ineptitude.
5 Devolvement of functions
All four of the proposals set out above have been based on the dismal failure on the part of the majority of our municipalities. But some municipalities have delivered excellent services and are functioning efficiently. Successful municipalities can take on additional functions.
Section 156(4) of the South African Constitution contains an extremely important provision. It states that the national government and provincial governments must (not may) assign to a municipality any of their functions if that function would most effectively be administered by the municipality, and if the municipality has the capacity to administer it.
A good example of this is Prasa (Passenger Rail Agency of South Africa). Prasa has been one of the most corrupt state-owned enterprises in the country. It has been administered appallingly over the past number of years, resulting in the virtual collapse of our train system.
If a municipality is functioning properly, and if it has an internal train system, that system should not be owned and run by Prasa; it should rather be owned and run by the municipality. That would ensure localised control which leads to a far better rail system than the one currently delivered by Prasa.
In addition, municipalities often try to escape their obligations by stating that a particular function applies at a national and provincial government level, not at a local level. One of the most important of those is the provision of affordable housing.
Municipalities should be given the responsibility for providing affordable housing within their boundaries. That would reduce the role played by the National Department of Housing and would require the National Treasury to allocate additional funds to municipalities to enable them to fulfil that role. Municipalities would generally be in a far better position to develop affordable housing for the poor than the national or provincial spheres of government.
If these functions, and any others that would be more appropriately administered at a local level, were to be assigned to local government, it could have a very positive impact on all the people residing within the municipalities.
In conclusion, the first four steps set out above require legislative intervention. It is therefore acknowledged that they cannot be implemented on a very short-term basis. But they could be targeted as steps that need to be taken over the next year.
Ideally, the first step set out above should be implemented before the next municipal election in 2026 so that all the voters can elect their councillors based on the new system of local government. That would necessitate an amendment to the Municipal Structures Act, which could be achieved within the course of the next year.
Similarly, the other legislative and other steps which need to be taken could all be implemented within the next year. If that happens, we would hopefully see a completely revised and new system of local government by the time we head to the voting station for the 2026 local government election. DM