Poor governance at municipal level is undermining service delivery and stifling economic growth across South Africa, President Cyril Ramaphosa has warned.
Delivering the keynote address at the 2026 National Local Economic Development Summit at the Birchwood Conference Centre on Wednesday, Ramaphosa called for urgent reforms to unlock local economies.
“The Auditor-General’s report on local government highlights persistent weaknesses that directly undermine service delivery and constrain local economic development,” he said.
He listed key shortcomings, including weak financial management and revenue collection, failure to maintain infrastructure, ineffective supply chain management, irregular and wasteful expenditure, and weak consequence management.
These failures, he said, are felt daily by citizens and businesses.
“These challenges translate into unreliable electricity, water insecurity, poor roads, poor service delivery and unsafe trading environments.”
The president’s warning comes as municipalities across the country continue to fail residents, leaving communities without basic services for extended periods.
Maluti-a-Phofung Local Municipality in the Free State has been experiencing a severe water crisis for years, with 70% of water lost due to leakages and outdated infrastructure as of November 2024.
In the Eastern Cape, Buffalo City Municipality has faced a prolonged water crisis, with communities in Bhisho, Kaysers Beach, Kidds Beach and Ncerha villages experiencing extended water shortages. The crisis led to protests in April 2025 that forced the temporary closure of the Eastern Cape Legislature.
Emfuleni Local Municipality in Gauteng has been in financial crisis since 2018 and was considered a broken municipality unable to recover from its failed enterprises by 2020, including ineffective water and sanitation provision.
Neighbouring Merafong City Local Municipality faces a collapse in service delivery, with electricity losses at 50,10% and water losses at 38,78%, according to a report released in February 2026.
In Mpumalanga, Emakhazeni Local Municipality recorded water losses of R17 million and electricity losses of R55,6 million in the 2024/25 financial year. Three out of four wastewater treatment works are in a high risk state.
Ngwathe Local Municipality in the Free State had electricity payment rates as low as 6% by September 2025, owing Eskom over R2,7 billion.
The Auditor-General’s report for the 2024-25 financial year indicated that the Free State and North West provinces ranked lowest, with both reporting only three clean audits.
Ramaphosa raised concern over chronic underinvestment in infrastructure maintenance, noting that municipalities are falling far below required benchmarks.
“National Treasury Guidelines require municipalities to budget 8% of the carrying value of property, plant and equipment. Many municipalities are budgeting less than 1%,” he said.
The president called for improved revenue collection and greater use of private investment to address infrastructure backlogs, saying municipalities must take the lead in resolving service delivery constraints.
“As my contribution to the deliberations of the summit, there are four sets of actions that I would like to put forward. The first of these is to unblock service delivery constraints at local government level, especially with regards to basic infrastructure,” he said.
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He said reliable energy, water and transport systems are essential to economic growth.
“Energy security, water provision, roads and rail lines are the foundation of growth. We have made much progress in tackling load shedding and improving the efficiency of our logistics sector. This summit must now translate national progress into local success,” the president said.
Ramaphosa said governance reform is non-negotiable if municipalities are to play their role in economic development.
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“Without fixing governance, we cannot fix service delivery and without fixing service delivery, we cannot unlock local economic development. The task of this summit is to shift the discussion from the problems to the solutions,” he said.
He added that municipalities must ensure conducive conditions for businesses to operate.
“Municipalities must be the frontline in unblocking infrastructure constraints, ensuring that the local industrial park has the power it needs and that township businesses have streetlighting to trade safely beyond daylight hours,” the president said.
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