Last week my partner’s parents returned from a week in Eswatini, where a tyrant king can at least keep the lights on and the water flowing, to their home in a tree-lined, high-end suburb just five minutes from the JSE. What they found was not the comfort of home but a stinky reminder of just how far the rot of state failure has spread.
No power from Wednesday to Sunday afternoon. No hot water, no refrigeration. And, as if scripted for ironic effect, sewage was spilling down their street from a burst pipe, filling the air with the stench of decay.
This isn’t some forgotten periphery. And if this is happening in one of the country’s wealthiest postcodes, imagine the horror stories unfolding in the forgotten municipalities that pepper SA’s hinterland.
How do you run a shop or a factory with no reliable power or water? Who will invest in a town that can’t keep the lights on or sewage off the streets? Companies close or relocate, jobs disappear, property values plummet.
You can’t run an economy on top of broken local governments. Of SA’s 257 municipalities just 34 received clean audits in 2024. At least 196 are either distressed or at risk of financial collapse. Municipal debt to Eskom and water boards is now unpayable. And while metros teeter, rural municipalities have already fallen: some can’t pay salaries, maintain infrastructure or even send bills to residents.
Even the national government now admits the model is failing. Co-operative governance minister Velenkosini Hlabisa formally launched a review of the 1998 white paper on local government on Friday, calling for “honest reflection and decisive action”. The current model, the review admits in breathtakingly understated fashion, is failing to deliver basic services, financial sustainability or even coherent governance. Quite.
In his latest newsletter, President Cyril Ramaphosa demonstrates how far removed he is from reality. Fresh from recently discovering that Joburg is about to show his G20 pals just how naked the emperor really is, he paints a picture of progress. He highlights the 2025 budget’s allocation of 61% of spending over the next three years to the social wage, including free primary healthcare, education and housing. He also notes adjustments to municipal allocations to tackle infrastructure needs and improve service delivery.
To say these broad strokes miss the granular failures on the ground would be akin to saying the EFF is only a little racist. The president’s emphasis on national programmes and fiscal allocations overlooks the systemic dysfunction at the municipal level, where the real crisis unfolds daily.
Someone who knows better is Musa Jack, programme manager of Anglo American’s Municipal Capability & Partnership Programme (MCPP). I interviewed her recently, and few people can match her pedigree in this space. A qualified town and regional planner, Jack helped develop the post-apartheid municipal legislative framework itself, including the very acts on systems and structures that underpin the local government model.
Now, from within the private sector, she’s trying to fix what she helped build. But she’s under no illusions. “Municipalities were never equipped for the scale of indigence they now face,” she told me. The assumption baked into the White Paper was that local government would fund itself: 80% from rates and service delivery, only 20% from national grants. That was always optimistic. In many towns it’s now laughable. Up to 80% of households are indigent in some regions, and even those who can pay often don’t. The result? A service delivery death spiral.
The MCPP doesn’t pretend to rescue local government. It tries something smarter: building capability from within. Anglo American works in eight municipalities across three provinces — Limpopo, North West and Northern Cape — coaching officials, not replacing them. The programme targets three core areas: basic service delivery (with a focus on water, roads and waste); infrastructure asset management and strategic long-term planning for a post-mining economy.
In Limpopo’s Blouberg local municipality, for example, the MCPP worked alongside the municipal project management unit to develop standard operating procedures and train local officials. The result? For the first time since its inception Blouberg completed 14 capital projects on time and within budget in 2022/23. It also allocated funds for road maintenance for the first time and secured an additional R10m in municipal infrastructure grant funding for this financial year, a direct result of its improved track record.
In the platinum group metal-rich Mogalakwena, where water losses were bleeding the municipality dry, the MCPP helped improve data management and leak detection. Losses dropped from 57% in 2022 to 51% in 2024. That’s tens of millions of litres of saved water, vital in a region where supply constraints threaten both communities and industry.
But as Jack warns, this model can’t scale without broader structural reform. Too many municipalities are just too small, too underresourced and too politically compromised to ever become viable on their own. Many simply don’t have a tax base. Others can’t attract qualified staff. And when political interference bleeds into administration, no amount of training can fix what isn’t allowed to function.
The MCPP shows what’s possible when public and private sector actors collaborate around shared accountability and long-term goals. But it also shows just how rare that is. Most municipalities don’t need a service provider. They need a lifeline and a redesign. Which is why the white paper review matters. For the first time in 25 years, we’re being invited to ask uncomfortable questions:
- Why do we have 257 municipalities?
- Should they all exist in their current form?
- Is the “developmental local government” ideal still realistic, or even coherent? and
- What are the fiscal, legal and constitutional levers required to build something that works?
Because here’s the rub: you cannot grow a national economy on a foundation of municipal failure. Roads, water, electricity, zoning, property rights ... these all live and die at the local level. Fix Eskom, sure. Tinker with the Treasury, yes. But if you can’t fix the towns and cities where actual people live and work, none of it matters.
• Avery, a financial journalist and broadcaster, produces BDTV's ‘Business Watch’. Contact him at Badger@businesslive.co.za.
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