Opening address by Minister Velenkosini Hlabisa at the White Paper on Local Government Executive Dialogue with the National Business Initiative (NBI), The conneXXion, Exxaro Resources, Centurion
“Every Municipality Must Work – A Call to Collective Action”
Programme Director; Deputy Ministers and senior leadership; the Exxaro CEO and other representatives from the National Business Initiative; our gracious hosts; distinguished CEOs and Board Chairs; Heads of state institutions; colleagues from national and provincial government; ladies and gentlemen, good morning and thank you for joining us in this working dialogue.
Much time, energy and resources have been invested in this review process, and we are therefore determined that the outcomes must far exceed the resources committed. Local government is the sphere closest to the people and the primary platform for economic growth and social development. South Africa requires a stable, capable and predictable local governance system that works consistently.
Such a system cannot be rebuilt through short-term fixes. This is why the review adopts short-, medium- and long-term horizons, recognising that meaningful reform must be sequenced over time. The first White Paper on Local Government was adopted in 1998. With this exercise, we are reimagining the next 30 years and charting a clear path for a modern, coherent and resilient local government system.
Today is about moving South Africa’s local government reforms from paper to practice, from discussion to disciplined execution, and from isolated fixes to a system that works in real places for households and firms every day.
We meet at a decisive moment in a reform process that government launched publicly last year, when we published a discussion document on the White Paper on local government review. We invited the country to respond and received 266 submissions from municipalities, business organisations, civil society, academia and traditional leadership.
Those inputs, together with roundtables and consultative sessions held across the country in Cape Town, Johannesburg, Durban, East London and other centres, have shaped a revised Draft White Paper on Local Government that sets out an integrated, sequenced agenda to modernise the system.
As we are aware, the Auditor-General’s latest consolidated MFMA report records a system that remains under severe stress. Only 41 of the country’s 257 municipalities achieved clean audits in 2023/24. Financial health is deteriorating in many municipalities, consequence management is uneven and service failures remain too frequent.
These findings echo what communities and businesses experience: failing infrastructure, rising operating costs and declining trust in the reliability of basic services. This is the reality that must guide our actions.
The Draft White Paper working document makes several key design choices that frame our discussion.
First, it treats local government as a system. The revised White Paper proposes a national policy coordination centre to end fragmented and duplicative rules imposed on municipalities. It also proposes an authoritative powers-and-functions map to clarify institutional responsibilities and a single inter-sphere calendar to align planning, budgeting, approval and reporting processes across all spheres of government.
These are not conceptual adjustments. They are operational requirements for achieving collective impact in local development.
Second, the approach shifts cooperative governance from discussions in forums to rules-based delivery. This includes binding intergovernmental agreements for priority programmes, escalation protocols with specific timelines when commitments are not met and two-way accountability across all spheres of government.
If delays occur in projects such as housing developments or bulk water infrastructure upgrades due to misaligned approvals or sequencing challenges, the system must clearly identify where the responsibility lies rather than placing the burden solely on municipalities.
Third, the revised White Paper introduces a single, data-driven oversight and early-warning system with standard indicators aligned to MFMA Circular 88. When risk thresholds are reached, mandatory early support will be triggered to prevent institutional collapse.
Fourth, the White Paper acknowledges the need to reform municipal finance by moving away from a one-size-fits-all approach.
Fifth, it prioritises professionalisation and digital governance, with emphasis on merit-based appointments and enforceable standards for senior managers. The proposed reforms aim to establish a municipal digital backbone that integrates financial management, procurement, asset management, service requests and council processes into transparent, auditable systems.
Political parties must also prioritise leadership deployment by ensuring that public representatives possess the necessary competencies and understanding of governance frameworks before assuming office.
Finally, the working document emphasises that spatial transformation, economic growth and climate resilience must be pursued as a single integrated outcome.
The District Development Model and the One Plans framework will be strengthened through binding place-based compacts with measurable outcomes, sequenced implementation pipelines and clear commitments from all partners.
Government is also introducing additional legislative mechanisms to support the reforms outlined in the revised White Paper on Local Government.
Programme Director,
I recognise that public trust has been eroded by plans that did not translate into meaningful results and by uneven implementation of policy frameworks. This is precisely why the working document proposes a small, cross-sphere, time-bound transition management body with representation from social partners.
This mechanism will help coordinate implementation, remove institutional obstacles, publish progress reports and ensure predictable sequencing of reforms. It is not intended to create additional bureaucracy but rather to serve as a temporary delivery steward to support implementation.
To our business partners, while we call on you to invest and contribute expertise, government must also reduce regulatory complexity. The proposed policy coordination centre will align national rules affecting municipalities and reduce duplicative reporting, contradictory norms and unpredictable compliance requirements that divert municipal capacity away from service delivery.
Where duplication imposes unnecessary costs on municipal performance and the broader economy, we must work together to eliminate it.
I therefore ask that your interventions be practical and precise. Where proposals are strong, confirm them. Where they require improvement, indicate clearly what would make them investable and executable. Where collaboration is needed, propose mechanisms that can be implemented in the near term.
This dialogue is not another consultation exercise. It represents the final structured opportunity for organised business to shape the revised Draft White Paper before it is submitted to Cabinet at the end of this month.
We already have the analysis and the institutional architecture. What we require now is collective discipline in implementation.
Let us use this engagement to do what South Africans have always done when confronted with difficult challenges: fix what is broken, protect what works and agree on what we will deliver together, by whom, by when and with what resources.
The Department of Cooperative Governance will incorporate the proposals emerging from this dialogue into the next iteration of the document and the transition arrangements guiding implementation.
We will report publicly on how stakeholder inputs have strengthened the policy and hold ourselves accountable to the standard set by the President: implementation and accountability.
I thank the National Business Initiative, Exxaro, our colleagues from the Department of Water and Sanitation and other government departments, as well as the business leaders who have dedicated their time to contribute to this important national effort.
I look forward to a robust and solutions-driven dialogue and to leaving this engagement with a clear, practical pathway toward municipalities that work.
I thank you.
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