South Africa’s 257 municipalities, the bedrock of local governance, are currently grappling with a severe trifecta of challenges: worsening financial mismanagement, decaying infrastructure and rapidly eroding citizen trust.
In response, a comprehensive review of the 1998 White Paper is now underway. This foundational policy was created to transform a racially segregated municipal system into a democratic, developmental one. The review aims to assess what has worked, identify gaps and propose a reimagined framework for local governance – one that is modern and aligned with the realities of South Africa.
The White Paper served as a visionary blueprint and a legislative catalyst, leading to a suite of enabling laws that shaped the new local government architecture. A key differentiating aspect for South Africa compared to many other countries was the emphasis on “developmental local government”, which aimed to address the inequalities inherited from apartheid.
While significant strides were initially made in establishing a democratic system and expanding basic services, the intervening quarter-century has revealed substantial gaps between this ambitious vision and on-the-ground realities. Persistent challenges, including widespread financial mismanagement, severe capacity deficits, deteriorating infrastructure and a breakdown of trust, have led to a marked regression in municipal performance.
A review of this blueprint is necessary to identify shortcomings and formulate medium- to long-term solutions to address the gaps. The review is grounded in the legislative framework established by Chapter 7 of the Constitution of South Africa, which provides the overarching framework for local government, defining the status, roles and responsibilities of municipalities.
The review process aims to design a modern, resilient and fit-for-purpose local government system aligned with the country’s constitutional vision, ultimately seeking to restore the social contract between municipalities and their citizens and unlock local government’s potential as a catalyst for sustainable national development.
Now 27 years old, the white paper framework shaped the system we have today, focused on service delivery, community participation and local development. But after nearly three decades, widespread financial and service delivery failures have deepened public frustration and mistrust. The review is a critical chance to reimagine local government to meet today’s challenges. However, there are several external factors that were not considered at the time of the white paper, including climate change and rapid technological advancements, to name a few.
As President Cyril Ramaphosa noted in his 2025 State of the Nation Address, “In many cities and towns across the country, roads are not maintained, water and electricity supply are often disrupted, refuse is not collected and sewage runs in the streets.”
The Municipal Financial Management Act governs municipal financial management with the aim of ensuring sound and sustainable management of the financial affairs of municipalities.
Yet, in practice, this goal remains elusive. Numerous reports over the years highlight ongoing challenges: the National Treasury has said that 65% of municipalities are in financial distress; households alone owe municipalities over R348-billion for electricity services rendered; and in the last five years, R18-billion in municipal funds were returned to the fiscus due to poor planning and ineffective spending. These figures represent missed opportunities for development and social upliftment.
At the heart of the crisis lies a breakdown in trust. Years of inadequate governance and lower-than-expected levels of service delivery have eroded public confidence in municipalities. This creates a vicious cycle: without trust, people cannot justify paying for services; without revenue, services and infrastructure deteriorate; and with reduced services, trust diminishes further.
Rebuilding that trust requires more than technical fixes; municipalities must be seen as legitimate, credible institutions. Key to this is treating citizens as partners, not just service recipients – when this happens, they become more willing to engage and pay.
Getting the basics right
Revenue recovery must start with establishing the fundamentals: timely and accurate billing, credible property valuations and verified infrastructure data. Too many municipalities still operate with outdated systems. Smart meters, geospatial audits and integrated billing platforms are not luxuries – they’re essential tools for managing modern cities. However, oversight is still crucial to ensure the systems are working. Customer service is at the heart of local government delivery.
The Local Government: Municipal Property Rates Act provides the legal basis for municipalities to levy property rates and requires regular general valuations to ensure fairness and accuracy.
Revenue leakage persists through undervalued properties, tampered meters, illegal connections and some unscrupulous behaviour. Without strong enforcement, good systems will weaken. Municipalities need strict credit control frameworks – clear, traceable processes for disconnections and debt recovery.
Structural reforms – when driven by evidence, enabled by technology and supported by skilled people – can yield measurable results. These may include reorganising revenue departments to improve accountability, introducing performance-based management systems, centralising billing and collections and tightening internal controls to curb revenue leakage.
Major municipal turnarounds can be achieved using tools to evaluate the efficacy of the revenue chain and diagnose its inefficiencies. Insights from this data can unlock bottlenecks, formulate sustainable solutions, accelerate revenue and deliver results.
Meaningful citizen engagement
The White Paper review correctly highlights the need to restore the relationship between local government and communities. This goes beyond perfunctory consultations – it requires authentic, ongoing engagement with residents. When people understand how tariffs are structured, what they’re paying for and how their input shapes decisions, they are more likely to pay and participate. Ultimately, transparency builds trust.
The balance between providing free basic services and remaining financially viable demands clear communication. Many indigent households end up exceeding their free allocations without realising the consequences, contributing to rising debt. Educating communities about their responsibilities is as important as delivering services: community mobilisation and public engagement strategies help municipalities facilitate these difficult but necessary conversations.
This means addressing root causes, not just symptoms. It means upgrading systems, improving data integrity, building institutional capacity and empowering leadership to act decisively.
This is a moment for decisive action and meaningful change; the revised White Paper can deliver new reforms that are critical to local government.
Ditiro Rantloane is an engagement manager at Ntiyiso Revenue Consulting, a firm focused on helping local government become more effective and efficient. He specialises in revenue and billing strategy, working with municipalities across all nine provinces to improve revenue performance and service delivery.
