Hope Ntanzi|Published
President Cyril Ramaphosa has proposed changing which functions municipalities are responsible for, ring-fencing water and electricity revenue for infrastructure maintenance and introducing compulsory licensing for service providers as part of a major overhaul of local government.
Launching the Revised White Paper on Local Government, Ramaphosa said the existing system needed fundamental reform to address failing services, unsustainable municipal finances, corruption and weak administrative capacity.
Under the proposed changes, municipalities would no longer automatically be expected to perform every function currently assigned to them.
Where a municipality lacks the capacity, revenue base or scale to deliver a service effectively, the responsibility could be assigned elsewhere, including at regional level or through partnerships and concession arrangements.
“This White Paper represents a fundamental reassessment of how local government is structured, financed, managed and held accountable,” Ramaphosa said.
He acknowledged that too many municipalities were failing to meet communities’ needs, with deteriorating infrastructure, unreliable services and administrations that were unresponsive to residents.
“This cannot continue,” he said.
Municipalities face financial and infrastructure crisis
A key proposal in the revised policy is that revenue from the sale of water and electricity must be reserved for maintaining the infrastructure needed to provide those services.
“Going forward, revenues from the sale of electricity and water will be ring-fenced and used to maintain infrastructure before anything else,” Ramaphosa said.
He said municipalities had too often invested in new infrastructure while neglecting existing networks, including water pipelines, electricity systems, roads and wastewater treatment plants.
“We cannot build our way out of failure if we do not maintain what we have already built,” he said.
The financial pressure on municipalities is reflected in their debt to Eskom, which Ramaphosa said exceeded R120 billion. Many municipalities are also in arrears to water boards.
The White Paper proposes stronger financial management, improved revenue collection, reduced losses and spending that delivers value.
It also recognises that municipalities have different financial circumstances, with metropolitan areas and growing cities having different resources from rural municipalities with limited revenue bases.
Ramaphosa said responsibilities, resources and support needed to be organised according to these differences rather than applying the same model everywhere.
The policy also proposes separating the role of service authority from service provider in water and electricity services, alongside compulsory licensing for all providers.
Ramaphosa said the provision of these services had not been sufficiently regulated. The proposed changes are intended to strengthen oversight while helping municipalities improve their ability to deliver essential services.
National and provincial government also responsible
Ramaphosa said municipal failure could not be treated solely as a problem within the boundaries of an individual municipality.
He argued that national and provincial governments also had a responsibility when mandates overlapped, investment was poorly coordinated or support arrived only after a crisis.
The revised White Paper proposes treating local government as an integrated system, requiring national departments, provinces, municipalities and state-owned entities to coordinate their work around shared priorities in districts and metropolitan areas.
It builds on the District Development Model, which was introduced to bring government institutions and their partners together around development priorities.
The policy also calls for municipalities to be professionalised, with appointments based on competence rather than political considerations. Councils are expected to provide effective oversight, while municipal officials must be held accountable for their work.
“There must be consequences when public resources are stolen, procurement is manipulated or public duties are neglected,” Ramaphosa said.
He said communities needed to be partners in governance and see tangible results from their participation.
“Participation cannot be reduced to meetings where people speak but nothing changes,” he said.
“Trust will not be restored by speeches. It will be restored when a reported fault is fixed promptly.”
Government sets out implementation plan
Cabinet has endorsed a phased approach to implementing the revised White Paper. A time-bound Local Government Transition Management Body, involving the Department of Cooperative Governance, the Presidency and National Treasury, will coordinate the reform process.
A single Local Government Transition Plan will identify what must change, which institutions are responsible, the sequence of implementation and how progress will be measured.
Ramaphosa said the transition body would not take over the lawful responsibilities of ministers, provincial governments, councils or municipal administrations.
Some reforms will require new legislation, financing arrangements and institutional capacity. Constitutional amendments may also be considered.
The revised policy comes nearly three decades after the original White Paper was adopted in 1998 to establish democratic local government and address the unequal municipal system inherited from apartheid.
Ramaphosa said democratic governments had expanded access to basic services, with more than 90% of households now having access to electricity and more than 87% having access to piped water.
However, he acknowledged that these gains had not eliminated service delivery failures and infrastructure shortages.
The launch also comes ahead of the November 4 local government elections. Ramaphosa urged registered voters to participate and called on political parties to ensure that political disputes did not disrupt municipal services after the polls.
“But once elected, they share an obligation greater than party advantage: to ensure that the municipality works,” he said.
“Our people must never be held hostage by political instability.”
hope.ntanzi@iol.co.za
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