President Cyril Ramaphosa has called for urgent reforms to unlock local economies, warning that poor governance at municipal level is undermining service delivery and stifling economic growth.
Delivering the keynote address at the 2026 National Local Economic Development (LED) Summit at the Birchwood Conference Centre on Wednesday, President Ramaphosa said persistent failures in local government are directly affecting economic opportunity.
“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.”
President Ramaphosa stressed that governance reform is non-negotiable if municipalities are to play their role in economic development.
“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,” the President said.
He raised concern over the 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.
He emphasised that 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.
President Ramaphosa 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. – SAnews.gov.za
