Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa
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Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa said 38 municipalities have been identified as distressed and are currently receiving support through the municipal performance turnaround strategy.
Hlabisa was responding to parliamentary questions from EFF MP Noluvuyo Tafeni, who asked whether his department has plans in place to provide financial, technical, and institutional support to financially distressed municipalities to enable them to manage infrastructure and service delivery demands during the election period.
In his response, Hlabisa said municipalities experiencing governance, financial management, or service delivery challenges were provided with support through a range of constitutional and legislative measures.
He also said there was technical assistance, financial recovery initiatives, capacity-building programmes, and, where warranted, formal interventions through the dissolution of a council.
“Municipal support is further implemented through established intergovernmental mechanisms and programmes aimed at improving municipal performance, financial sustainability, and service delivery outcomes.”
Hlabisa said the department has support measures in place for financially distressed municipalities that extend through the current municipal term and into the 2026 local government elections.
“These measures are not funded through a separate election-specific allocation but are implemented through the department’s existing municipal support and turnaround programmes.”
The minister stated that the department, working together with the National Treasury, provided support to financially distressed municipalities through established intergovernmental fiscal instruments.
These measures include the Municipal Infrastructure Grant, a Schedule 6B allocation of R535 566 000 for municipalities that require infrastructure implementation support, participation in the National Treasury’s Municipal Debt Relief Programme to tackle historical Eskom debt, and participation in debt-relief arrangements involving Water Boards and the Water Trading Entity.
“Equitable share and conditional grant transfers continue to be administered in accordance with the Division of Revenue Act and the Municipal Finance Management Act.”
Hlabisa added that technical support was primarily provided through the Municipal Infrastructure Support Agent, which deploys engineering, project management, and infrastructure-planning expertise to municipalities to support infrastructure delivery, operations, and maintenance.
There was also institutional support through the District Development Model, which promotes integrated planning, budgeting and implementation across all 52 districts and metropolitan areas through the One-Plan approach.
“Additional support is provided through the Municipal Performance Turnaround Strategy, overseen by the Cabinet-established Inter-Ministerial Committee, which currently supports 38 distressed municipalities through dedicated finance and governance workstreams.”
He added that in the most serious cases, support may be escalated through formal interventions under Section 139 of the Constitution to restore governance, financial stability, and administrative functionality.
“These measures are intended to safeguard service continuity, strengthen municipal institutions, and support a stable transition before and after the 2026 local government elections.”
According to Hlabisa, the department was monitoring the implementation and impact of support and intervention measures ahead of the elections.
Of the 38 distressed municipalities assessed during the Auditor-General’s 2024/25 Municipal Finance Management Act audit cycle, audit outcomes improved in seven, remained unchanged in 28, regressed in two, and one audit had not yet been finalised at the legislated reporting date.
“By August 2026, 35 of the 38 distressed municipalities had adopted Municipal Support and Intervention Plans or Financial Recovery Plans.
“In addition, Municipal Infrastructure Grant expenditure improved in the majority of these municipalities compared to the previous financial year.”
He stated that his department was finalising a joint circular with National Treasury to strengthen the invocation, implementation, monitoring and oversight of interventions.
“The circular is intended to improve the effectiveness of interventions, clarify institutional responsibilities and strengthen intergovernmental coordination both before and after municipal elections.
“The department will continue, together with provincial governments and National Treasury, to implement these support measures throughout the election period and the transition to newly elected councils, escalating interventions where necessary to ensure sustainable governance, financial stability and the continued delivery of basic services.”
