Every Municipality Must Work
Honourable Chairperson, Honourable Members of the National Council of Provinces,
Chairperson of the Select Committee: Hon Kaunda
Honourable Minister Velenkosini Hlabisa: Bulawayo
Deputy Minister Rev. Prince Zolile Burns-Ncamashe,
Premiers and Ministers
MEC’s and Deputy Ministers,
Chairperson of the National House of Traditional and Khoi-San Leaders
South African Local Government Association (SALGA),
Directors-General of DCoG and
DG Mrs Matlatsi
CEO of MISA,
Leadership of IMATU and SAMWU, Fellow South Africans,
Ladies and gentlemen.
Good day.
1.INTRODUCTION
Hon Chairpeson
It is an honour to rise in this House as we consider Budget Vote 3 for the Department of Cooperative Governance under the theme: “Every Municipality Must Work.”
Firstly, to join South Africans in passing a message of condolences to the Family and the Kingdom, on the passing on of His Majesty King Makhosonke Mabhena.
May his loving and caring soul rest in peace.
Hon Chairperson.
This House plays a unique legislative role in our constitutional system within the context of coopereative governance, by ensuring that the voices and development priorities of provinces and municipalities shape national policy and resource allocation.
In debating Vote 3, we are considering the State’s commitment to building ethical, capable and developmental local government, characterised by municipalities with capacity and skills required to perform their constitutional mandate, stabilise local governance and strengthen service delivery to communities across the country.
This debate is informed by the State of Local Government Report, which clearly shows progress recorded in many parts of the country, even though some choose to eclipse progress, by their pre-occupation with negative thinking, disregarding the collective intelligence of South Africans in working with us to rebalance the system, by their destructive negative energies.
In this regard through provision of collective leadership with provinces and working together with municipalities, we shall triumph over adversity because, the centre of gravity holds.
Given what His Excellency President Ramaphosa said, that 2026 is the Year to fix Local Government.
Of course, not withstanding the inherent systemic challenges that are receiving the attention of the Ministry and the Department.
In doing so, we continue to assess progress being made across provinces to rebuild local government and ensure proper relational governance, wherein communities are directly involved on matters of their own municipalities, than being recipients of services.
In this regard I would like to appreciate the good work that provinces continue to do, particularly Hon MEC’s of Local Government and Traditional Affairs, in supporting the municipalities to sharpen their systems to serve the citizens better.
2.WHITE PAPER REVIEW
The transformation of local government guided by the 1998 White Paper Policy made tremendous progress in the establishment of structures and systems to ensure implementation of developmental programme and provision of services to communities.
Noting the capacity of the system to have carried Macro Development Objectives of the country as well articulated in various National Development Plans from 1995 hitherto.
To date, our ongoing efforts to ensure an effective and efficient functioning local government, as envisaged by the National Development Plan: Vision 2030, is taking place within the context of the need for reform.
This reform is being realised through the review of the 1998 White Paper on Local Government (WPLG), which remains the policy mainstay for local government transformation.
We are confident that the progressive reforms incorporated into the current WPLG will transform the local government landscape into an effective domain for improved service delivery and high moral conscience required to serve the public.
And reset the system for transformational and values-based leadership that should become the permant feature of the system, for demonstration of high level of ethics and integrity.
Our objective is to address governance failures, weak financial controls, structural design limitations, planning and implementation challenges, socio-economic pressures and political systems constraints.
Hon Chairperson.
The published policy document which we want to have it adopted before the municipal elections scheduled for the 4th of November 2026, would need National Collaborative Efforts for its implementation.
Hence our continuous enegagemet with various political parties in the country for confluence of perspectices on the primacy of this policy for growth and development of our country.
Primarily therefore contained in the White Paper on Local Governement, are the elaborated and decisive Five Pillars aimed at supporting the efforts to strengthen governance in municiplaities:
First, establishment of one local government system – not fragmented departments acting in silos.
Through this defined system, clarify powers and functions, strengthening oversight with data-driven early warning systems and enforcing binding sector delivery protocols in local spaces.
Second, clean and capable governance. Ethical leadership, minimum competency standards, clear separation between political and administrative roles, stabilised coalitions and zero tolerance for corruption with real consequences.
Third, differentiation and reform pathways. We are moving beyond a one-size-fits-all model.
A new categorisation framework and clear reform pathways will align powers, functions, and sustainability, including a long-term transition toward a more
rationalised system. Acknowledging that municipalities are not equal in capacity and context.
Fourth, partnership-based governance. Participation must move beyond compliance. We are strengthening structured partnerships with communities, business, and traditional authorities grounded in shared accountability and binding agreements.
Fifth, financial and service delivery reform. Finance must follow function.
Equally we are establishing the National Coordination Centre to manage policy transition and its implementation.
Hon Chairperson.
While we are pursuing these reforms, we remain committed in implementing Municipal Perfomance and Turnaround Strategy to addres the challenges around the pillars of local government including, revenues enhancement strategies by strengthening the municipal fiscal policy, unfunded mandates by aligning functions, strengthening trading services, improving asset management, and restoring infrastructure maintenance, so that service reliability becomes the norm, not the exception.
3.DISTRICT DEVELOPMENT MODEL
Honourable Chairperson.
The District Development Model (DDM) remains an integral part of South Africa’s development strategy.
His Excellency President Ramaphosa, conceptualized and launched DDM to provide a more practical framework to ensure realization of Chapter Three (3) of the Constitution in relations to planning, funding, implementation, monitoring of performance and evaluation.
It functions as the primary operational framework to bridge the gap between planning and service delivery across all the forty-four (44) districts and eight (8) metropolitan areas.
Through the DDM, we aim to improve cooperative governance by ensuring alignment and integration of national, provincial and local government plans.
Our goal is to accelerate service delivery, and make sure that people get water, better sanitation facilities, electricity, better roads and fill potholes, safety, enhance accountability and ensure that communities receive coordinated and sustainable support, to meet their daily socio-economic needs.
We have recently agreed to establish a Joint Electricity Crisis Management Committee between COGTA, Electricity and Energy Department, ESKOM ad SALGA to strengthen the existing mechanism like Distribution Agency Agreement between
struggling municipalities and ESKOM, to ensure quality and sustainable provision of electricity to citizens throughout the country.
And explore other mechanisms of managing the Intergovernmental Debts in this area of public service.
The quality of One Plans has improved nationally, and catalytic projects are beginning to anchor development priorities.
However, the assessment also makes it clear that these gains remain uneven due to factors that need our undivided attention.
Like, weak institutional structures, inconsistent participation by government departments and state-owned entities, limited civil society and private sector involvement, and the need for budgets alignment continue to constrain the full impact of the DDM.
However, the identified limitations are receiving attention of the DDM Champions to ensure successful realistation of the adopted system of governance and implementation.
4.CONSTITUTIONAL INTERVENTIONS
Honourable Chairperson.
Over the past year, the work undertaken across provinces has demonstrated the importance of cooperative governance in practice.
As part of our ongoing commitment to ensuring that every municipality in South Africa functions effectively and delivers quality services to our people, we continue to strengthen our support, oversight and monitoring of municipalities under constitutional intervention.
Over the past year, we have extended sections 154 and 139(7) of the Constitution of the Republic of South Africa of 1996, as well as Section 150 of the Municipal Finance Management Act of 2003, to intervene in various municipalities, including the following:
▪ Buffalo City Metro (Eastern Cape) – we had deployed 10 experts to address and provide governance, financial management, supply chain management (SCM), engineering and administrative support towards improving performance and service delivery of the municipality.
▪ Nelson Mandela Metro (Eastern Cape) – we had also deployed 10 experts to address and provide governance, financial management, SCM, engineering and administrative support towards improving performance and service delivery of the municipality.
By yesterday together with Hon MEC Williams ,we had an engagement with political and administrative leadership of the Metro as part of our ongoing efforts to ensure stabilization of the city.
Makana Local Municipality (Eastern Cape) – we had deployed six experts to address and provide governance, financial management, SCM, engineering and administrative support to ensure improved performance and service delivery of the municipality.
▪ Maluti-a-Phofung Local Municipality (Free State) – we deployed two senior engineers from MISA and a Town Planner from Free State CoGTA to assist the municipality with stabilisation of infrastructure and service delivery. Since there is now a municipal manager, a handover report has been provided to carry forward the established best practices.
▪ Emfuleni Local Municipality (Gauteng) – government established a Special Purpose Vehicle between the municipality and Rand Water, endorsed by National Treasury and supported by The Presidency as part of Operation Vulindlela Phase 2, to stabilise water services while strengthening financial sustainability in the municipality.
▪ Ditsobotla Local Municipality (North West) – After several provincial interventions failed to stabilise the municipality, Cabinet approved a national intervention to address key issues such as inadequate access to water and sanitation, unreliable electricity supply and poor road infrastructure.
5.DISTRICTS OVERSIGHT AND SUPPORT ENGAGEMENTS
Through targeted oversight visits and support engagements in numerous district municipalities and local municipalities, we have been working directly with provincial governments, municipalities, SALGA and sector departments to address systemic challenges in local government.
These visits were working interventions aimed at diagnosing failures in service delivery, strengthening coordination between spheres of government, and agreeing on practical programmes of action to stabilise municipalities and accelerate service delivery.
Some of the challenges identified in the municipalities that were engaged included systemic challenges such as weak governance and political instability; unstable
coalitions , financial management, rising municipal Eskom debt, Municpal Consumers Debt, Water Boards and other creditors; weak revenue collection and billing systems; water, sanitation, road and waste infrastructure challenges due to poor maintenance; and limited technical and managerial capacity.
The broader structural issues such as low maintenance expenditure, unfunded budgets, incomplete indigent registers, weak infrastructure planning, and limited ability to recruit and retain critical staff were also highlighted.
As a result of all that we have developed a detailed implementation plan to address these challenges and through our collective leadership with provinces, significant progress has been made to implement the action plan.
This work demonstrates the need for strong parterships between public and private sector institutions and cooperstive governanance , to support of local government as evidenced by the `Presidential Working Groups dedicated to metros stabilsation.
The progress being achieved through these engagements shows the power of collective leadership required under the current circumstances to impact the systems meaningfully.
House Chairperson, for the benefit of this House, let us outline the progress we have achieved even further:
▪ In the Eastern Cape, municipalities in the Chris Hani and Amathole districts are implementing revenue-boosting programmes, installing smart meters, and addressing water and wastewater infrastructure challenges.
▪ In the Free State, particularly in the Thabo Mofutsanyana and Lejweleputswa district municipalities, we are seeing improved council stability, filling of critical posts and measurable reductions in irregular expenditure.
▪ In Gauteng, while challenges remain in Sedibeng District Municipality and particularly in Emfuleni Local Municipality, there has been progress in repairing water infrastructure, clearing sewer blockages and improving drinking water quality.
▪ In Mpumalanga, the Gert Sibande District Municipality has demonstrated strong intergovernmental coordination, with financial recovery plans reviewed, technical support deployed, and corrective plans implemented for water and sanitation compliance.
▪ In Limpopo, the Mopani District Municipality has recorded progress in strengthening council processes, expanding water treatment capacity and improving revenue collection.
National and provincial governments are intensifying interventions to stabilise governance and restore service delivery across the country.
Honourable Members : these are signs that cooperative governance continues to translate plans into practical actions on the ground.
6.PROGRESS ON KEY MUNICIPAL INTERVENTIONS
In addition to ongoing interventions, progress is being made in addressing several structural challenges in local government.
▪ Municipal Debt to Eskom: The Department of Electricity and Energy – together with Eskom and supported by National Treasury – has concluded debt arrangement agreements with defaulting municipalities. While these agreements provide a repayment framework, compliance remains uneven. A review of the arrangements has been completed and options such as Distribution Agency Agreements are being considered.
▪ Municipal Debt to Water Boards: The Department of Water and Sanitation (DWS), supported by National Treasury, has implemented debt-repayment agreements with municipalities owing water boards. Effective from 1 July 2025, these agreements include structured repayment plans and conditional incentives to encourage compliance.
▪ Debt Owed by Organs of State to Municipalities: National Treasury, in collaboration with provinces, is monitoring and segmenting debt owed by government departments and entities to municipalities to ensure outstanding accounts are settled.
▪ Support to Distressed Municipalities: Following an IMC resolution to expand support beyond the initial 10 worst-performing municipalities, national departments have begun onboarding an additional 28 municipalities and aligning support through updated Municipal Support and Improvement Plans.
▪ Unfunded Municipal Budgets: Unfunded budgets remain a key risk to municipal sustainability. National Treasury and DCoG have issued directives to strengthen compliance and prevent the approval of unfunded budgets, with further measures to be proposed to the Inter-Ministerial Committee (IMC).
▪ Review of the Municipal Funding Model: This review forms part of the broader WPLG Review. DCoG is working with National Treasury to develop aligned, consensus-based policy options. Government remains committed to reviewing the local government fiscal framework. The Budget Forum has approved a comprehensive programme of action to guide this work, including the terms of reference for the review and the initiation of a procurement process to secure expertise for the detailed technical work. The aim of the review is to critically examine the financial viability of the local government fiscal framework and identify key factors influencing its effectiveness, stability and long-term sustainability. This will be achieved by conducting an in-depth examination of existing policies,
practices and mechanisms governing the allocation, management and use of fiscal resources at the local government level.
▪ Professionalisation of Municipalities: The professionalisation of municipal administration and leadership remains a priority. Work under the White Paper Review process is underway, and a comprehensive report outlining progress and next steps will be submitted to IMC and Cabinet.
▪ Strengthening of Oversight for enhanced Accountability.
▪ The Introduction of the Coalitions Bill will go a long way in stabilising Coalition arrangements in the next administration of the municipalities.
▪ Adressing Salary Structures of Municipal Managers and Senior Municipal Officials for skills attraction and retention.
▪ Introduction of Digital governance for decision making and record keeping
▪ Establishment of Strategic Hub for data driven leadership and evidence based management.
▪ Introduction of various policy frameworks and legislations to stabilize the system
▪ Strengthening our work around the pillars of local government remains our pre-occupation: Governance, Institutional capacity, LED, Service delivery
7.MIG 6B INTERVENTION – Limpopo and Free State
Honourable Members.
A key priority supported through this budget is accelerating infrastructure delivery.
This financial year an amount of R535 million has been set aside, an increase from R493.8 million that was allocated in the previous financial year, reaffirming our commitment to ensuring communities receive basic services such as water, sanitation, roads and community facilities.
The Municipal Infrastructure Support Agent (MISA) has been deployed to fast-track projects, strengthen technical capacity of the struggling municipalities and improve value for money.
MISA remains the professional system in the department available for support, projects planning and implementation.
This support is already yielding results, with improved infrastructure procurement systems, better project planning, and increased MIG expenditure, indicating stronger municipal capacity to deliver infrastructure.
Honourable Chairperson, allow us to highlight work done in this regard from Limpopo and Free State.
In Limpopo, two municipalities have been prioritised, receiving a combined allocation of over R152 million to advance strategic infrastructure development.
▪ The Thabazimbi Local Municipality has been allocated R9.9 million for a project currently at the preliminary design stage, signalling the emergence of a pipeline that will unlock improved services for local communities.
▪ The Sekhukhune District Municipality has been allocated R142.8 million across 11 projects, with six projects having progressed to preliminary design and five undergoing assessments at the DWS Technical Report stage in preparation for formal registration. This demonstrates encouraging momentum in a district long affected by infrastructure backlogs and rising service-delivery demands.
In the Free State, 11 local municipalities are benefitting from focused MIG 6B allocations, with each municipality implementing a funded project and the majority already positioned in the procurement phase, reflecting strengthened project readiness across the province.
▪ These include Matjhabeng, allocated R36.5 million for a project already under construction; Letsemeng, allocated R5 million for a project in the design and tender stage; and Mohokare, Masilonyana, Dihlabeng, Nketoana, Moqhaka and Ngwathe, with project values ranging from R4.9 million and R12.1 million, all progressing through procurement.
▪ Furthermore, Metsimaholo, Mafube and Phumelela local municipalities, with project values ranging between R5 million and R13.5 million, are similarly advancing through procurement. This demonstrates a province moving decisively towards implementation and improved infrastructure delivery.
Honourable Members, these investments represent far more than figures in a budget; they represent the very pipelines through which water security, improved sanitation and resilient municipal infrastructure will reach households across our provinces. Movement of projects into procurement and construction as we see in the Free State reflects a maturing implementation capability, whilst the steady advancement through design and technical assessment evident in Limpopo signals the development of a robust future project portfolio.
Through these targeted allocations, supported by the dedicated efforts of our technical teams, we are ensuring that municipalities are not only funded but fully capacitated to move projects from planning to completion. This is how we safeguard infrastructure delivery and uphold our mandate to build capable, service-ready and working municipalities for the people of South Africa.
8.PROPOSED JOINT CIRCULAR ON SECTION 139 INTERVENTIONS MANAGEMENT
Section 139 of the Constitution empowers provincial and national government to intervene when a municipality fails to fulfil its constitutional or legislative obligations, safeguarding service delivery, financial stability and community rights.
However, experience has shown that some interventions have been uneven, prolonged and ineffective, undermining stability and public confidence.
To address this, a proposed Joint Circular on Section 139 Interventions Management has been developed.
The circular establishes a clear national framework for initiating, implementing, monitoring and concluding interventions. It clarifies procedures, strengthens oversight, defines the roles of provinces, national departments and National Treasury, and promotes measurable, time-bound outcomes.
It also provides guidance on the full range of Section 139 measures, including directives, assumption of responsibilities, financial recovery plans, dissolution of councils and national intervention where provinces fail to act.
Importantly, the circular does not amend the Constitution; it ensures that Section 139 is applied consistently, lawfully and in a manner that restores municipal functionality and public trust.
9.INTEGRATED URBAN DEVELOPMENT FRAMEWORK
When Cabinet adopted the Integrated Urban Development Framework (IUDF) in 2016, it did so in recognition of a simple but profound reality: South Africa’s development trajectory is inseparable from its urban trajectory.
The IUDF provides a strategic roadmap to guide urban growth towards spatial transformation, inclusivity, resilience and economic productivity across cities and towns of all sizes.
In this regard, the department is finalising a new implementation plan that will provide guidance for the next five years.
As we move into the next phase of the IUDF Implementation Plan (2025–2030), our collective task is to shift decisively from planning to impact.
This requires stronger alignment across spheres of government, clearer prioritisation of spatial transformation outcomes, and sustained support to urban municipalities as they navigate the complex development pressures. For municipalities, this means:
▪ Strengthening the link between spatial development frameworks, capital budgets and economic strategies; Prioritising compact, connected and inclusive urban forms; and Investing in infrastructure that supports economic growth and access to employment opportunities.
10.MISA SUPPORT TO MUNICIPALITIES ON INFRASTRUCTURE PROCUREMENT REFORMS
MISA provided technical support to 19 municipalities to strengthen infrastructure delivery through improved procurement systems.
This support focused on implementing the Infrastructure Delivery Management System (IDMS) and the Framework for Infrastructure Delivery and Procurement Management (FIDPM) to improve governance, efficiency and accountability in infrastructure procurement.
MISA assisted municipalities across the infrastructure procurement value chain, including project planning, preparation, procurement and contract management.
Municipal officials were supported to align infrastructure projects with municipal planning instruments, improve feasibility studies and procurement plans, strengthen SCM processes, and enhance bid evaluation and contract management practices.
Through capacity-building initiatives and technical work sessions, MISA supported municipalities to institutionalise the IDMS and FIDPM frameworks within their systems and align municipal supply chain policies with infrastructure delivery principles. These interventions have improved procurement processes, strengthened project implementation and contributed to increased expenditure of the MIG, indicating improved municipal readiness and capacity to deliver infrastructure.
11.SUPPORT TO MUNICIPALITIES IN COLLABORATION WITH PRIVATE SECTOR
MISA has also strengthened collaboration with the private sector, state entities and municipalities to mobilise resources and technical expertise for priority infrastructure projects. In the 2025/26 financial year, support was provided to Fetakgomo Tubatse, Ditsobotla, Gamagara and Merafong local municipalities.
A key focus has been leveraging Social and Labour Plan (SLP) programmes of mining companies to support infrastructure development in mining-affected communities. This
approach aligns mining sector obligations with municipal infrastructure priorities to improve service delivery and support sustainable local development.
The programme has strengthened coordination between the Department of Mineral and Petroleum Resources, municipalities, mining companies and sector departments to ensure SLP investments are integrated into municipal planning frameworks.
In the 2026/27 financial year, MISA will continue expanding these partnerships by improving coordination mechanisms, identifying infrastructure projects suitable for SLP investment, and providing technical support to ensure effective planning, implementation and sustainability.
12.CONCLUSION
Honourable Members:
Our central responsibility is to ensure that the progress that we are beginning to see in districts and municipalities across the country is consolidated and accelerated.
Without adequate resources, the programmes that support municipalities, particularly those implemented through MISA,RMO the DDM and intergovernmental support initiatives, cannot achieve their full impact.
Therefore, well-functioning municipalities can provide communities with water, electricity, sanitation, roads and opportunities for development.
However, when municipalities fail, our communities suffer.
We are determined to ensure that through this budget, every municipality in the country works effectively and efficiently to provide quality and consistent services to our people.
Government is taking decisive steps across the country to stabilise municipalities, strengthen governance and rebuild the capacity of local government.
Honourable Chairperson,
We are presenting the Budget Vote 3 for COGTA for the 2026/27 financial year for consideration and adaption.
I thank you.