South Africa's Municipal Burden

Media from Wix

For many communities, the municipality is the daily test of whether democracy is working. It is where water either comes out of the tap or does not. It is where refuse is collected or left in the street. It is where roads are maintained or slowly disappear into potholes. Where municipalities have strong administrations, credible revenue systems and political discipline, decentralisation can support better services. Where they do not, decentralisation becomes a mandate without the means to deliver.

South Africa faces a local government crisis with deep historical roots. The post-1994 state inherited a local government system built on racial inequality (de Visser, 2024). Fiscal decentralisation was intended to redistribute resources, expand and equalise basic services, support pro-poor policy, and improve efficiency and accountability (Bahl & Smoke, 2003). The principle was sound. Section 156(4) of the Constitution recognises that additional functions should be assigned to municipalities only where they can be administered effectively at the local level and where the municipality has the capacity to perform them. The problem is that South Africa created a local government system that relies heavily on municipal capacity, while that capacity remains deeply unequal.

Metropolitan municipalities, secondary cities, small towns and rural municipalities do not have the same revenue base, staff depth or technical systems. This does not mean metros are functioning well. It means they generally begin with a stronger fiscal and administrative base than smaller, more rural municipalities. Metros have broader tax bases through property rates, service charges and other own-revenue sources, while many smaller municipalities depend heavily on intergovernmental transfers. This imbalance makes transfers necessary, but it also has serious implications for accountability, planning and institutional capacity.

While metros often attract skilled professionals and have greater institutional resilience, smaller municipalities face acute capacity shortages. These include difficulty attracting and retaining competent staff, weak financial management systems, and inadequate oversight mechanisms (Bester, 2024). Outsourcing has not fixed the skills gap. A stark example is that municipalities spent R848.85 million on financial reporting consultants in 2023/24, yet the Auditor-General still found material misstatements in the areas where consultants had worked at 101 municipalities (Auditor-General of South Africa, 2025). This suggests that the problem is not only a shortage of technical skills. It is also weak internal control, poor contract management and limited accountability. A municipality that cannot manage its own systems will also struggle to manage a consultant.

South Africa is also dealing with municipalities that cannot properly spend the funds available to them. Municipalities continue to underspend infrastructure grants, even where service-delivery backlogs remain severe (National Treasury, 2026). These points reflect weaknesses in project preparation, procurement, contract management and implementation capacity. National Treasury has noted that some municipalities were not adequately prepared to implement planned 2025/26 projects, while supply chain management inefficiencies and capacity constraints continued to hinder implementation (National Treasury, 2026).

The political environment has made these institutional weaknesses more difficult to manage. The 2021 local government elections produced 66 hung councils, meaning no party won an outright majority in those municipalities, leading to coalition governments. A coalition government is not automatically bad. It can improve accountability where parties negotiate clear programmes, disclose trade-offs and share responsibility openly. However, many municipal coalitions have been unstable, especially in major urban councils. Coalition instability can aggravate service-delivery failure when leadership changes, council deadlocks, and contested appointments disrupt budgeting, contract management, and administrative continuity (Pholoma et al., 2024; Zweni et al., 2024).

This is why the 2026 local government elections should not be reduced to party slogans. The real question is whether the next councils can pass funded budgets, appoint competent municipal managers and chief financial officers, protect administrations from patronage, maintain infrastructure, collect revenue fairly, spend grants properly, and govern coalitions without turning councils into bargaining tables.

Decentralisation still matters. Local democracy still matters. But decentralisation only works when money, powers, skills and accountability move together. Where they do not, the result is not responsive government. It is the decentralisation of hardship. That is the local government reality voters face as they head to the polls on 4 November 2026.

References

Auditor-General of South Africa. (2025). Consolidated general report on local government audit outcomes: 2023–24.

Bahl, R. W., & Smoke, P. (2003). Overview of fiscal decentralisation in South Africa. In R. W. Bahl & P. Smoke (Eds.), Restructuring local government finance in developing countries: Lessons from South Africa (pp. 1–22). Edward Elgar.

Bester, J. (2024). Making dysfunctional municipalities functional: Towards a framework for improving municipal service delivery performance in South African municipalities. Commonwealth Journal of Local Governance.

de Visser, J. (2024). Financing local governments in South Africa. Anuario de Derecho Municipal, 17, 169–185.

Electoral Commission of South Africa. (2021). Final results of 2021 municipal elections.

Electoral Commission of South Africa. (2026). Electoral Commission welcomes announcement of 4 November 2026 as local government elections date.

National Treasury. (2026). Local government revenue and expenditure: Second quarter local government Section 71 report for the period 1 July 2025 to 31 December 2025.

Pholoma, M., Lubinga, S., Masiya, T., & Madumo, O. S. (2024). The influence of unstable coalition governments in Gauteng metropolitan municipalities. Journal of Local Government Research and Innovation, 5, Article a195.

Zweni, A., Koma, S., & Ndevu, Z. (2024). Coalition effects on financial and service delivery performance in metropolitan municipalities in Gauteng. Journal of Local Government Research and Innovation, 5, Article a183.