21 April 2025

Reviewing the White Paper on Local Government to strengthen the sphere of government to deliver on its mandate

The ANC has declared the year 2026 as the year of fixing local government as a primary priority. This priority is linked to the ongoing efforts of the government to strengthen municipalities. Over the years, the ANC has acknowledged structural constraints that have impacted the financial viability of many municipalities in rural areas and in locations with low revenue generation capacity.

The seventh administration has begun the process of the White Paper review with the intention of a “system-wide reset”. The review aims to fix broken service delivery, weak financial management, and capacity gaps, fostering a more modern, efficient, and accountable local government structure. A major aspect of the review is the work being done by the National Treasury on the review of the local government fiscal framework. As part of our public participation process on the Division of Revenue Bill, stakeholders have called for an increase in the equitable allocation for local government, changing the division of revenue distribution. The ANC in Parliament will advance engagements on the local government fiscal framework to ensure municipalities without an adequate tax base are supported by the fiscus, considering different shelters such as the spatial structure of the municipalities and the cost of service provision.

A municipality in rural Eastern Cape with human settlements in distant locations and a municipality with partially integrated human settlements will have different costs of delivering a similar basic service. A rural municipality’s cost will be higher, requiring more resources despite having a lower population. The local government fiscal framework should be more context-responsive.

Through the implementation of the District Development Model, the government intends to harness the financial and technical capacity of the National and Provincial government and their entities to directly support local government and local economic development. The DDM is an enabling mechanism rather than a duplication of the cooperative governance system required by our constitution.

In order to develop a capable state, the development of internal state capacity to implement and deliver various basic services is important to reduce reliance on external service providers. Our municipalities must have sufficient staff and machinery to provide various plumbing services, and road and other infrastructure maintenance. This will reduce dependence on outsourcing while building internal capabilities as required by the Municipal Systems Act.

As part of fixing local government progress can be highlighted, while many challenges remain. In the area of core service delivery, every ANC-led municipality is implementing ward-level turnaround plans with defined minimum response standards, ensuring that the delivery of water, sanitation, electricity, roads, refuse removal, and housing is structured, measurable and accountable.

In municipalities such as Enoch Mgijima, all ward committees are now fully operational, supported by structured oversight systems, while the installation of 15,000 smart meters has generated a R36 million revenue improvement in a single month and enabled full utilisation of infrastructure grants.

In Mamusa, infrastructure grant expenditure has improved significantly, with major water projects nearing completion, while similar interventions are underway in municipalities across the country, including Knysna, Dr JS Moroka, Msunduzi and the City of Johannesburg.

In water and sanitation, interventions have been intensified through direct operational support by the Department of Water and Sanitation, which has deployed technical teams to municipalities experiencing severe service delivery challenges. These interventions are focused on restoring
functionality in wastewater treatment works, repairing pump stations, reducing leakages and strengthening bulk supply systems, while improving operational capacity within municipalities.

The African National Congress notes the ongoing and constructive interventions undertaken to address the financial and operational challenges facing municipalities in relation to electricity distribution,
particularly the growing debt owed to Eskom.

We acknowledge that governance and financial management are among the highest risks.

That is precisely why the R54 billion Metro Reform and the Eskom debt relief framework are tied to compliance, audited accounts, and professional management. Public funds cannot flow without accountability. This approach will be expanded to improve overall governance in the three spheres of government.

The Division of Revenue Bill include allocations to support various programmes such as the Water Services Infrastructure Grant with 4.3 billion to accelerate backlog reduction of water and sanitation services, and R5 billion for Public Transport Networks for non-motorised transport, which caters for many South Africans. The bill further allocates funds for Municipal Disaster Responses, which are critical to support locations impacted by climate change disasters.