Finance Minister Godongwana’s lacklustre plans to revitalise local government will not only fail to renew the hopes of residents suffering under the weight of infrastructure failure, but it also demonstrates that the promises made during President Ramaphosa’s SONA speech were merely lip service to the idea of fixing local government.
During the SONA, President Ramaphosa’s commitment to reimagine local government funding left many hoping for a fundamental reform of the broken local government environment. President Ramaphosa laid local government’s continued decay out in full detail. In his words – “roads are not maintained, water and electricity supply are often disrupted, refuse is not collected and sewage runs in the streets.”
However, the budget presented by Minister Godongwana laid out his Budget for the financial year ahead offers no such plan, a sentiment that is easily be supported through figures found in this year’s Division of Revenue Amendment Bill (DORA).
The increased funding allocations to local government leave much to be desired, with municipalities receiving around R106 billion from the treasury, grants excluded. This marks a miniscule 4.74% increase from 2024’s DORA Bill. Future estimates for forward allocations further illustrate the lack of urgent attention local government is receiving. An estimated increase of 4.22% is expected for 2026/27, in fact marking a decrease in funding growth.
Excluding grant allocations from National government, in 2024/25 local government received 4.7% of total funding, whilst the amount this year has decreased slightly to 4.6%. This demonstrates that the GNU is not serious about funding local government where the greatest crises are facing South Africans on a daily basis.
Grant funding to municipalities is crucial as they supplement key funds which are used to provide bulk services and maintain municipal infrastructure. In the case of smaller, more rural municipalities the Municipal Infrastructure Grant (MIG)is the key funding instrument and yet it has been raised by no more than 2% in the 2025/26 budget. The Urban Settlements Development Grant (USDG) as the funding instrument of metro municipalities facing massive service and infrastructure backlogs, has increased by only 6/1% for 2025/26 and 5.9% for 2026/27.
The causes of local government failure extend beyond the issue of funding and include poor leadership, bad governance, corruption, an inability to manage critical projects and a procurement system that is not achieving value for money. However, at the start of it, is the reality that municipalities are hopelessly underfunded and until this is remedied there will be little prospect of real reforms in local government.
The lived experience for an increasing number of South Africans is life under the weight of electricity outages, water stoppages, collapsing road networks, sewage spills and unreliable waste removal services. The 2025/26 budget, coupled with serious local government reforms on oversight of infrastructure spends, was the opportunity to signal relief from this GNU about the future of local government. It has been yet another missed opportunity and yet another hollow promise from President more focussed on mystical bullet trains, smart cities and Tintswalos than tackling the real service delivery issues.
ActionSA will explore all available mechanisms to present solutions in the National Assembly on how local government needs to be funded and how it can be reformed to ensure that funds applied to municipalities to improve infrastructure and services generate real improvements for local residents.
Budget 2025: Local Government Revitalisation Left Waiting As President’s SONA Lip Service Exposed
Finance Minister Godongwana’s lacklustre plans to revitalise local government will not only fail to renew the hopes of residents suffering under the weight of infrastructure failure, but it also demonstrates that the promises made during President Ramaphosa’s SONA speech were merely lip service to the idea of fixing local government.
During the SONA, President Ramaphosa’s commitment to reimagine local government funding left many hoping for a fundamental reform of the broken local government environment. President Ramaphosa laid local government’s continued decay out in full detail. In his words – “roads are not maintained, water and electricity supply are often disrupted, refuse is not collected and sewage runs in the streets.”
However, the budget presented by Minister Godongwana laid out his Budget for the financial year ahead offers no such plan, a sentiment that is easily be supported through figures found in this year’s Division of Revenue Amendment Bill (DORA).
The increased funding allocations to local government leave much to be desired, with municipalities receiving around R106 billion from the treasury, grants excluded. This marks a miniscule 4.74% increase from 2024’s DORA Bill. Future estimates for forward allocations further illustrate the lack of urgent attention local government is receiving. An estimated increase of 4.22% is expected for 2026/27, in fact marking a decrease in funding growth.
Excluding grant allocations from National government, in 2024/25 local government received 4.7% of total funding, whilst the amount this year has decreased slightly to 4.6%. This demonstrates that the GNU is not serious about funding local government where the greatest crises are facing South Africans on a daily basis.
Grant funding to municipalities is crucial as they supplement key funds which are used to provide bulk services and maintain municipal infrastructure. In the case of smaller, more rural municipalities the Municipal Infrastructure Grant (MIG)is the key funding instrument and yet it has been raised by no more than 2% in the 2025/26 budget. The Urban Settlements Development Grant (USDG) as the funding instrument of metro municipalities facing massive service and infrastructure backlogs, has increased by only 6/1% for 2025/26 and 5.9% for 2026/27.
The causes of local government failure extend beyond the issue of funding and include poor leadership, bad governance, corruption, an inability to manage critical projects and a procurement system that is not achieving value for money. However, at the start of it, is the reality that municipalities are hopelessly underfunded and until this is remedied there will be little prospect of real reforms in local government.
The lived experience for an increasing number of South Africans is life under the weight of electricity outages, water stoppages, collapsing road networks, sewage spills and unreliable waste removal services. The 2025/26 budget, coupled with serious local government reforms on oversight of infrastructure spends, was the opportunity to signal relief from this GNU about the future of local government. It has been yet another missed opportunity and yet another hollow promise from President more focussed on mystical bullet trains, smart cities and Tintswalos than tackling the real service delivery issues.
ActionSA will explore all available mechanisms to present solutions in the National Assembly on how local government needs to be funded and how it can be reformed to ensure that funds applied to municipalities to improve infrastructure and services generate real improvements for local residents.