President Cyril Ramaphosa highlighted the urgency of reforms necessary to revitalise South Africa’s local economies, grappling under the weight of failing municipal governance.
Speaking to a congregation of policymakers, business leaders, and stakeholders at the Birchwood Conference Centre, Ramaphosa underscored the direct correlation between poor local governance and the stunted economic opportunities facing citizens and businesses alike.
‘The Auditor-General’s report on local government highlights persistent weaknesses that directly undermine service delivery and constrain local economic development,’ South African Government News reported him as stating, unveiling a troubling report card of municipal performance.
In a pivotal address at the 2026 National Local Economic Development (LED) Summit on Wednesday, the President pointed out alarming failures that plague local governance: weak financial management and revenue collection, neglect of infrastructure maintenance, ineffective supply chain management, and a lack of accountability resulting in irregular and wasteful expenditures.
These shortcomings have tangible consequences, affecting daily life and economic viability for communities across South Africa. ‘These challenges translate into unreliable electricity, water insecurity, poor roads, poor service delivery, and unsafe trading environments,’ Ramaphosa lamented, calling for a shift in focus from merely identifying problems to proffering effective solutions.
At the heart of Ramaphosa’s message was the imperative for governance reform deemed non-negotiable for fostering economic development at the municipal level.
‘Without fixing governance, we cannot fix service delivery, and without fixing service delivery, we cannot unlock local economic development,’ he asserted, framing the summit as a collaborative space for transitioning dialogue towards actionable strategies.
Highlighting the critical underinvestment in infrastructure, Ramaphosa stressed that municipalities are currently budgeting less than 1% for necessary maintenance, starkly below the National Treasury’s required benchmark of 8% of the carrying value of property, plant, and equipment.
‘This chronic underinvestment spells disaster for our infrastructure and, consequently, our economic potential,’ he insisted.
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Furthermore, Ramaphosa called for enhanced revenue collection measures and increased private sector investment to tackle infrastructure backlogs head-on. He urged municipalities to take the lead, emphasising, ‘We must unblock service delivery constraints at local government level, especially regarding basic infrastructure,’
The emphasis on reliable energy, water, and transport systems emerges as a cornerstone of sustainable economic growth. ‘Energy security, water provision, roads, and rail lines are the foundation of growth,’ Ramaphosa noted.
Ramaphosa implored local governments to create an enabling environment for businesses. ‘Municipalities must be the frontline in unblocking infrastructure constraints. Ensuring that the local industrial park has the power it needs is essential, as is providing township businesses with the necessary street lighting to trade safely beyond daylight hours,’ he affirmed.
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Picture: Jeffrey Abrahams / Gallo Images
