Municipalities buckle under debt, skills shortage burden

DILEMMA: For too long, municipalities have focused on new projects while neglecting critical assets…

By  Monk Nkomo

Skills shortages and financial distress undermined  the performance of  many of South Africa’s municipalities where service quality also remained uneven, according to Velenkosi Hlabisa, Minister of Cooperative Governance  and Traditional Affairs.

Addressing the 2025 SALGA National Members Assembly  at the Chief Albert Luthuli International Convention Centre in Durban, Hlabisa lamented about service quality at municipalities many of which were financially strained.

The Auditor-General reports showed that a total 41  municipalities had achieved clean audits in 2023\24 while  over one hundred  operated  with unfunded budgets. Poverty also remained widespread while youth employment exceeded 50 percent. ‘’ These realities demand urgent reform to restore functionality and public trust,’’ Hlabisa said.

Infrastructure-led growth must be prioritised. Water, electricity, roads and digital connectivity were the backbone  of economic expansion. Maintenance of existing infrastructure must become non-negotiable. For too long, municipalities had focused on new projects while neglecting critical  assets. This approach was unsustainable and must change.

This Assembly convened as South Africa prepared for the 2026 Local Government Elections and as SALGA approached its 30-year milestone of organised local government. These were moments of reflection and renewal that demanded honesty, courage and decisive action.

Hlabisa added that over the past three decades, local government had been the frontline of service delivery and development. ‘’We acknowledge the progress made: access to clean water has improved from 85% to 88.5%, sanitation from 68.9% to 80.7%, and electricity access now stands at 94.3% nationally. These gains are the result of dedicated councillors, municipal managers, engineers, planners, and frontline workers who serve under challenging conditions. We salute your commitment and professionalism’’.

These numbers, Hlabisa noted, masked persistent challenges. Service quality remained uneven; infrastructure was ageing and under-maintained; skills shortages and financial distress undermined performance.

The National Assembly’s meeting coincided with the launch of the 16 Days of Activism for No Violence Against Women and Children. Hlabisa called on South Africans to confront a new and urgent reality: Gender-Based Violence and Femicide had been classified as a national disaster. This was immediately after the classification of GBVF as a national disaster, a process that would enable all- in- government cooperation to fight this crisis, as directed by President Cyril Ramaphosa.

‘’This is not only a social crisis; it is a governance imperative. Municipalities must integrate GBVF prevention and response into Integrated Development Plans and disaster risk strategies. This means creating safe public spaces, supporting shelters, partnering with NGOs and driving community-based prevention programmes. Local government cannot be a bystander in this fight; it must be a proactive agent of protection and empowerment. We call upon SALGA to ensure that this initiative is realised and that our women and children feel safe in the areas where they live’’.

Hlabisa also touched on South Africa’s recent successful hosting of the historic G20 Leadership Summit which he said was not only a diplomatic triumph. It was a strategic signal to the world that our nation was ready to lead on inclusive development, climate adaptation and digital transformation.

The Summit’s working groups on infrastructure investment, climate resilience and digital economy provided a roadmap that municipalities could localise.

Local government was not a spectator in globalisation. It was the launchpad for its solutions. By aligning Integrated Development Plans with G20 priorities, municipalities could attract green financing, leverage technology partnerships and position themselves as hubs for innovation and investment. The District Development Model must serve as the bridge between global commitments and local implementation, ensuring that every community benefitted from the opportunities unlocked by South Africa’s global leadership.

‘’As the custodian of cooperative governance, CoGTA is driving a comprehensive renewal of local government anchored on policy and legislative reform, institutional modernisation and professionalisation. The review of the White Paper on Local Government is a once-in-a-generation opportunity to redesign the developmental local government model for the 21st century. This review is not a mere academic exercise; it is a practical blueprint to address structural weaknesses, including fragmented planning, weak financial controls, political instability and inadequate technical capacity.

‘’We are driving the process to be concluded by March 2026. We are introducing the Coalitions Bill to stabilise governance in municipalities plagued by political volatility, because instability in councils directly translates into service delivery failures and erodes investor confidence. The Municipal Systems Amendment Act strengthens professionalisation by separating politics from administration and enforcing accountability’’.

Hlabisa said institutional modernisation was equally critical. Through the District Development Model, they were institutionalising integrated planning and implementation across all spheres of government. This “One Plan, One Budget, One Approach” framework eliminated duplication and fragmentation, ensuring coherence and efficiency. They were prioritising digital transformation because a modern municipality must be data-driven, transparent and efficient. Digital platforms would enable real-time monitoring of service delivery, improve revenue collection and enhance citizen engagement.

‘’Municipalities are not mere service delivery machines; they are strategic economic hubs. Every zoning decision, infrastructure upgrade and investment partnership influences job creation and economic resilience. To unlock this potential, municipalities must modernise regulatory environments and streamline business processes’’.

The theme of this Assembly, “Empowering Municipalities to Drive South Africa’s Growth Agenda through Economic Resilience and Sustainable Service Delivery”, was not aspirational, Hlabisa added.  It was urgent and achievable. The government cannot do this alone. SALGA must continue to be the unified voice of municipalities. The private sector must invest in innovation and infrastructure.

Traditional leaders must be integrated into the planning process. Communities must hold authorities  accountable. As CoGTA, they reaffirmed their commitment to accelerate reforms, strengthen support for struggling municipalities, institutionalise the District Development Model and build digitally enabled, climate-resilient, financially stable, and ethically governed municipalities. All government departments, from the National to the Provincial, must pay what they owe to municipalities. This was a joint process with the National Treasury. Treasury must apply a similar approach when withholding equitable shares to municipalities.

Professionalisation was also being advanced through the review of the remuneration system for Senior Managers, in particular, the Municipal Managers and section 56 Managers. This system, approved by MinMEC on November 21, 2025, aligned with the South African Local Government Bargaining Council’s job evaluation and grading system and provided a single, vertically integrated pay scale.

Importantly, competency assessments would now serve solely for development purposes, delinking them from remuneration determination. This reform addressed long-standing concerns about fairness and consistency in municipal management appointments and pay structures. The Department, working with SALGA, was presently investigating the grading and TASK levels for municipalities to mitigate unintended consequences arising from the introduction of the new system. Soon, the Government Gazette regarding this would be published.

Earlier this month, the department submitted a detailed response to the Independent Commission for the Remuneration of Public Office Bearers regarding its draft annual recommendations for the 2025/26 financial year. Hlabisa said they reaffirmed support for a 4.1% cost-of-living adjustment for members of municipal councils and for Traditional and Khoi-San leaders. Importantly, they  stressed the need for the Commission to address outstanding issues raised by the President following representations from the Minister of Finance and the Chief Justice on its major review report.

These matters included pension and medical aid benefits for councillors, as well as the formulation of a remuneration dispensation for members of local houses and traditional councils who were not traditional leaders, in line with section 219 of the Constitution and the Traditional and Khoi-San Leadership Act 3 of 2019.

‘’We urged the Commission to expedite its work and publish the final recommendations in the Government Gazette without delay, enabling consultations with MECs and ensuring that upper limits for councillors are gazetted timeously. This is critical for stability, compliance, and effective planning across all spheres of governance.’’

Hlabisa said the path to South Africa’s success was profoundly interconnected with the effectiveness of local governments. When municipalities operated efficiently and with integrity, the entire nation stood to thrive.

‘’Now is the time to act decisively. Let us channel our energy and passion into developing municipalities that serve as dynamic hubs of opportunity, progress, and creativity’’.

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