The Minister of Cooperative Governance and Traditional Affairs, Velenkosini Hlabisa, has called on South Africa’s local governments to deal with the litany of governance failings that are undermining their functionality.

He was reacting to the release of the report of the Auditor-General into local government for the 2024/25 year. As reported in this newspaper, it found that more than half of municipalities were effectively bankrupt, 45% passed unfunded budgets, and fewer than 20% managed clean audits.

Adverse audit outcomes across this level of government have been a longstanding headache, pointing to deeper crises within it. Despite marginal changes year-on-year, audit reports paint a consistently disturbing picture.

“The report confirms that too many municipalities remain trapped in a pattern of weak financial management, persistent non-compliance, and inadequate accountability. What is particularly troubling is not only the performance itself, but the persistence of the same weaknesses over time,” the minister said in a statement.

He pointed out that 117 municipalities (around 46% of the total) received unqualified audit opinions with findings. In other words, while they could present their financial records accurately, there were serious substantive failings in their actual conduct.

The minister added: “Municipalities must act decisively to address audit findings and improve service delivery. [The Department of Cooperative Governance and Traditional Affairs] will continue to provide support where needed, but there must be accountability for poor performance and persistent governance failures.”

The minister pledged redoubled oversight and support to municipalities, including enhancing consequence management, professionalisation of administrations, and cooperation between the department and provinces to assist distressed municipalities.

“Clean governance is achievable. The task before every municipality is to ensure that good governance becomes the norm rather than the exception. Ultimately, the success of every municipality will be measured by whether communities experience improved services and a better quality of life,” Minister Hlabisa concluded.

Financial and governance difficulties at local government level date back to the very founding of the system in the 1990s. This involved a process of amalgamation and consolidation of jurisdictions with widely divergent economic potential and human capacity. Local government was also given extensive responsibilities to drive development programmes. Many municipalities were simply not up to this; and in areas where opportunities were scarce, jobs in municipal institutions were sought-after forms of patronage. The result was that problems common to the South African state as a whole were especially pronounced at this level.

The system has always worked unevenly. Decades of departmental and provincial initiatives have produced little real improvement. Recent thinking – expressed in the so-called District Development Model and in the White Paper on local government – propose fundamental changes to the system design.

However, these appear to demand greater centralisation, which will likely swamp some of the more functional centres and make them responsible for large jurisdictions that are essentially unviable. It is also by no means clear that the systems of corrupt extraction and favouritism can be dealt with by structural reforms.