“South Africa’s municipal governance crisis has intensified after new reporting highlighted about R268.13 billion in unauthorised, irregular, fruitless and wasteful expenditure, while Cooperative Governance Minister Velenkosini Hlabisa called for tighter controls over senior municipal appointments. The developments come weeks before the 4 November 2026 local government elections and as Cabinet prepares to implement a Revised White Paper aimed at strengthening accountability, financial sustainability and institutional performance in municipalities.”
South Africa’s municipal governance crisis has moved sharply back to the centre of the political agenda after Cooperative Governance and Traditional Affairs Minister Velenkosini Hlabisa warned that poor appointments, weak accountability and political interference are helping drive financial and service-delivery failures in municipalities.
The warning comes as government prepares to implement a Revised White Paper on Local Government and as South Africans head towards the 4 November 2026 local government elections. At the same time, new reporting on municipal finances shows that unauthorised, irregular, fruitless and wasteful expenditure reached about R268.13 billion in the 2024/25 financial year. The scale of the figure has renewed questions about whether municipalities have the administrative capacity, political stability and oversight systems needed to manage public money effectively.
Hlabisa’s intervention is significant because it connects the financial crisis to the quality of political and administrative leadership. Speaking on 5 October, he argued that senior municipal appointments need to be tightened and that government should intervene earlier in recruitment processes. His comments place professionalisation at the heart of the next phase of local-government reform.
The minister’s remarks followed Cabinet’s approval of the Final Revised White Paper on Local Government, 2026. Government says the policy responds to persistent governance, institutional, financial and service-delivery challenges. It places greater emphasis on implementation, accountability, institutional coherence and financial sustainability, while also providing for a time-bound Transition Management Body and a coordinated implementation programme involving Cooperative Governance, The Presidency and National Treasury.
The R268.13 billion figure should also be understood carefully. Unauthorised, irregular, fruitless and wasteful expenditure does not automatically mean that R268 billion was literally stolen or physically wasted. It is a broad measure covering spending that breached legal or procedural requirements, exceeded approved budgets, or failed to produce the required value. Nevertheless, the size and persistence of the balance point to serious weaknesses in financial management and governance.
National Treasury reporting shows that the UIFWE balance increased from about R264.1 billion in 2023/24 to R268.13 billion in 2024/25. That increase may appear modest compared with the total, but it is politically important because it suggests that municipalities have not yet reversed the underlying pattern of weak controls and non-compliance.
Auditor-General findings reinforce the concern. In its 2024/25 consolidated local-government audit outcomes, the Auditor-General reported that municipalities continued to lose billions through poor decisions, neglect and inefficiencies. It also found that 51% of municipalities had material findings relating to consequence management. In other words, many councils were not consistently investigating or dealing with financial misconduct and irregular expenditure in the manner required by law.
The problem is therefore not simply the existence of irregular spending. It is what happens after the spending is identified. The Auditor-General reported that 116 municipalities did not investigate the previous year’s irregular expenditure, while 106 failed to investigate fruitless and wasteful expenditure and 95 failed to investigate unauthorised expenditure. These figures highlight a recurring governance weakness: rules may exist, but enforcement is often slow, inconsistent or ineffective.
This is the environment in which Hlabisa’s criticism of municipal appointments becomes important. If senior managers, chief financial officers and municipal managers do not have the required skills or independence, councils can struggle to enforce financial controls. Equally, political leaders who lack the technical understanding or willingness to act may be unable to hold administrators accountable.
Hlabisa has specifically criticised what he described as the appointment of friends, family members and political allies instead of suitably qualified officials. The government’s proposed approach is to scrutinise recruitment processes earlier, including checking whether advertisements for senior municipal positions comply with requirements before appointments are made.
The Revised White Paper is therefore being positioned as a broader institutional reform rather than a single anti-corruption measure. Government says it wants a local-government system that is more capable, accountable, financially sustainable and responsive to communities.
The scale also matters because local government depends heavily on public confidence. Residents expect rates, service charges and intergovernmental grants to be converted into functioning systems and visible improvements. When spending is irregular and investigations stall, communities can reasonably question whether institutions are protecting their interests. Restoring confidence therefore requires transparent reporting, timely investigations and clear consequences for officials or political leaders who fail their responsibilities. It also requires residents to see credible evidence that reforms are improving daily municipal performance.
South Africa’s municipal governance challenge is also complicated by political fragmentation. The local political landscape has become increasingly coalition-driven, making council stability an important part of service delivery. A municipality can have technically capable officials but still struggle if political leaders cannot agree on budgets, appointments, oversight decisions and development priorities.
That is why the reform programme’s emphasis on institutional coherence matters. The policy will need to connect political leadership, municipal administration, provincial oversight and national support instead of treating failures as isolated problems inside individual municipalities.
The upcoming local government elections provide both a risk and an opportunity. New councils could bring stronger political mandates and renewed oversight, but they could also inherit unresolved financial liabilities, administrative vacancies and weak systems. Voters will therefore be choosing not only political representatives but, indirectly, the governing structures that will determine how municipal resources are managed over the next term.
For political parties, the governance crisis creates a difficult accountability test. Campaign promises about better services will carry little weight if councils cannot demonstrate how they will improve procurement, financial reporting, infrastructure maintenance and consequence management. Parties seeking voter support will increasingly be expected to explain not only what they want to build but how they intend to manage public institutions.
For communities, the central question is even more direct: will reform translate into better services? Residents are likely to judge the success of the new policy by practical outcomes rather than the language of government documents. A reduction in irregular spending, faster action against misconduct, stronger municipal finances and more reliable services would provide tangible evidence that governance reform is working.
There is also a broader democratic issue at stake. Municipalities are the level of government closest to citizens. When local institutions function properly, they can strengthen trust in democracy by showing residents that public participation produces visible results. When they fail repeatedly, frustration can turn into political disengagement, protest and declining confidence in public institutions.
South Africa therefore enters the final weeks before the 2026 municipal elections with local governance firmly under scrutiny. The R268.13 billion expenditure problem, the Auditor-General’s findings on consequence management and Hlabisa’s push for professional appointments all point to the same underlying challenge: the country needs municipalities that can turn public resources into measurable public value.
The Revised White Paper offers government a framework for attempting that transformation, but implementation will determine whether it becomes another policy document or a genuine turning point. The transition arrangements, recruitment reforms, financial controls and accountability mechanisms will have to survive political changes and be applied consistently across municipalities.
Ultimately, the success of local-government reform will be measured not by the number of new rules introduced, but by whether councils become more stable, officials more accountable and public money better protected. With voters preparing to cast their ballots on 4 November, governance has become one of the defining issues of the political contest.
South Africa’s municipal crisis is therefore not simply an administrative problem. It is a test of political leadership, institutional accountability and democratic trust. The coming electoral cycle will determine who controls local councils, while the implementation of the Revised White Paper will determine whether those councils have the systems and discipline required to govern effectively.
