President Cyril Ramaphosa has warned of the plight of municipalities across the country and declared much of local government “in crisis” while pressing for urgent reforms.
At a meeting between the national executive and the Free State provincial government on Friday, Ramaphosa struck a careful balance between praise and the harsh reality: progress is visible, but the system that underpins it is faltering.
“To put it bluntly,” he said, “local government is in crisis across much, if not most, of the country.”
Ramaphosa positioned the Free State as a crucial engine for jobs, investment and national recovery.
The numbers tell a disturbing story. By 2025, 35 of South Africa’s 257 municipalities were officially classified as distressed, of which almost two-thirds risk of failure.
In the Free State alone, seven municipalities have already been placed under administration.
Ramaphosa pointed to a toxic mix of underfunding, weak revenue systems, capacity shortages and corruption as key drivers of the collapse, warning that failing municipalities are eroding not only service delivery but public trust itself.
“If there are weaknesses or shortcomings in local government, it is not just service delivery that suffers,” he said.
“We are aware of the reality and magnitude of this problem. Underfunding, lack of capacity, high debt and struggling revenue generation models are just some of the challenges.
“At the same time, many municipalities are virtually paralyzed by poor governance, financial mismanagement and corruption.”
Still, the president’s message was not without optimism.
He commended the Free State government, led by Prime Minister MaQueen Letsoha-Mathae, for what he described as a “forward-looking and results-oriented” agenda, emphasizing youth employment programs, agricultural expansion and township economic revival.
The province’s pass rate of 89.33%, the second highest nationally, was also praised, alongside strong performance in infrastructure spending and job creation initiatives that reached more than 46,000 beneficiaries.
Crucially, Ramaphosa framed the Free State as a strategic economic hub with untapped potential: a central logistics corridor, a major agricultural producer and an emerging player in renewable energy and manufacturing.
“The Free State is uniquely positioned to be at the center of our country’s economic growth story,” he said.
But unlocking that potential, he emphasized, depends on laying the foundations.
The government is now overhauling the local finance model, introducing ring-fenced utilities for water and electricity, and consulting on a new White Paper on Local Government – all aimed at stabilizing municipalities and restoring investor confidence.
With the South African Investment Conference looming next week, Ramaphosa has signaled that reforms are no longer optional, but urgent.
“Restoring the fortunes of local government must be at the center of our efforts,” he said.
IOL politics
Kamogelo Moichela
iol.co.za