Why well-funded SA municipalities still fail to deliver

Sandile Swana, a principal consultant at the Centre for Strategic Leadership and a member of the 70s Group, puts his finger on a stubborn problem: even the best run municipalities in South Africa cannot consistently spend money that has already been handed to them for capital projects. That single fact, he argues, sits at the heart of a broader malaise in which the country’s local government sector has traded a proud history of excellence for an entrenched culture of underperformance.

The numbers are stark. No single municipality, he notes, has managed to spend 100% of both its total capital budgets and all conditional grants in every consecutive financial year between 2021 and 2026. Roughly 66% of municipalities have managed to spend their fully funded capital budgets while falling short on quality standards, accounting and audit requirements. The result is that 63% of municipalities in the country are either financially distressed or financially non-compliant.

For Swana, this is the puzzle voters must confront. Why do municipalities fail to fully spend budgets when the money is physically in hand and the projects are clearly demarcated at municipal and ward level within set timeframes? Why does the pattern repeat itself, with the same parties implicated continuing to win the largest share of the municipal vote?

The paradox is sharper given South Africa’s inheritance. Project management and engineering have been core skills in the country for more than 150 years, anchored by world-class universities including UCT, US, UWC, CPUT, Wits, UP, UKZN and UJ, among others. The National Planning Commission shows the entire municipal sector has failed to meet National Development Plan targets between 2021 and 2026, despite the NDP and the Constitution both carrying chapters focused squarely on local government. Municipalities produce ward-based integrated development plans each year, declared credible by COGTA and Provincial Treasury. A credible plan, by definition, is fully funded and backed by the skills to implement it. Yet in general terms, Swana writes, there is no political will, gumption or adroitness to carry those plans through.

Cape Town illustrates the point. Often touted as the gold standard of municipal performance, the city averages between 1% and 2% local GDP growth against the NDP’s stipulated 5.4%. Even during the 2004 to 2008 economic boom, Cape Town never went significantly beyond 4% while Tshwane, Joburg and eThekwini did. The city posts an unemployment rate of 21.9% in 2026, decisively moving away from the NDP’s 5% target. An analysis citing Bureau for Economic Research data shows the Western Cape’s unemployment rate has quadrupled since 1994, from 5% to 21.9%, a faster increase than any other province. Governance by the DA since 2006, Swana argues, has neither helped nor changed this picture.

Meanwhile, the recent past offers a different benchmark. Within living memory, voters elected high performing mayors and worked with competent councillors and municipal managers. During the boom years, Tshwane, Joburg and eThekwini were clear leaders, Cape Town was fourth, and all eight top performing municipalities were not mining towns. The calibre of leadership that produced those results, he writes, included Smangaliso Mkhatshwa, Gwen Ramakgopa, Amos Masondo, Duma Nkosi, Ntombi Mekgwe, Obed Mlaba, Nomaindia Mfeketo, Helen Zille, Dan Plato, Sindisile Maclean, Ntobentle Peter, Itumeleng Kotsoane and Playfair Marule. The ANC was still able at that time to field high performing mayors and municipal managers. Those indicators have not been surpassed since 2008; decline has instead become the norm.

The losses are measurable. Between 2004 and 2008, Joburg was the undisputed International Financial Centre and hub of Africa. In the 2021 to 2026 period, that status has been fully taken by Casablanca in Morocco. Today the top International Financial Centres are Casablanca, Mauritius and Kigali, followed by Joburg and Cape Town, with Nairobi sixth. South Africa is nowhere near number one.

Port performance tells a similar story. Between 2004 and 2011, Durban and Cape Town ports functioned reliably and coped well with cargo surges, including those of the 2022 Fifa World Cup period. In the Container Port Performance Index for 2024, Durban ranks last in the world at 403 out of 403, with Cape Town third from the bottom at 400.

City cleanliness and safety have also slipped into what Swana calls ghettoised cities and smaller towns across the country. Joburg, Cape Town and Durban once maintained Fifa-standard cleanliness and safety; today only Cape Town has largely kept that standard, despite mushrooming squatter camps in the CBD and simmering land invasions. The townships along the N2 highway from Cape Town International Airport to the CBD remain uncleaned and unsettled, and no major South African city offers safe, regulated, subsidised and scheduled mass transport for workers, residents and tourists.

The infrastructure shortfall, Swana insists, must be understood in the context of unspent capital budgets returned to the National Treasury, not austerity or funding model problems. Credible plans align with StatsSA population growth projections, and capital grants are sensitive to that growth. The National Treasury requires municipalities to budget 8% of infrastructure value for planned and unplanned maintenance; the overwhelming majority budget only 2 to 4%, making maintenance impossible. Only about 27% of required health inspectors exist, Joburg has roughly half its building and infrastructure inspectors, meaning inspections occur perhaps once every 10 to 15 years, and most municipalities lack registered engineers qualified to sign off on complex structures. The country faces a 90% deficit of engineers compared to OECD countries.

The remedy, Swana concludes, lies with voters: insist that known solutions be fully implemented, ensure every rand does its job, and ensure every municipal post is filled only by correctly qualified people. Political party loyalty, he writes, never confers competence on anyone, and citizens must be prepared to give up undeserved salaries and benefits. The period ahead demands that progress at ward and city level be quantified upfront, with corresponding skills and professional ethics clearly articulated and enforced. The time has come, he argues, to move beyond voting novices into power. Whether voters will take up that demand at the next municipal polls remains the open question.