The country increasingly act as though every municipality must simultaneously be a developmental agency, an infrastructure provider, a welfare platform, a planning authority, a compliance machine, a financial control centre, a procurement institution and a technology-enabled reporting node of national standard.
Image: Itumeleng English/African News Agency (ANA)
South Africa's local government problem is not only that municipalities are weak.
The problem is also that the system has become too elaborate for many municipalities to govern, says, Burgert Gildenhuys, the founder of BC Gildenhuys & Associates in response to the needs of the developing local government system in SA.
Writing in the Urban Pulse SA March 2026 newsletter, he says that for years, the standard explanation for the country’s local government failures has sounded almost beyond dispute.
“Municipalities are struggling because they lack skills. They do not have enough competent engineers, financial managers, planners, project managers, accountants, technicians and administrators. They are under-capacitated. They need more training, more support, more intervention and more oversight.”
Municipal weakness is real
There is truth in that diagnosis, says BC Gildenhuys & Associates. The urban and regional development services provider says it would be absurd to deny it. It says that the latest official findings show that municipal weakness is real.
“The Auditor-General’s 2023/24 municipal audit outcomes show that only 41 municipalities achieved clean audits, while many others remained unqualified with findings, qualified, adverse or disclaimed. National Treasury has also reported that 162 municipalities were in financial distress as at 30 June 2024. Its 2023/24 MFMA compliance report further records vacancies in critical senior posts such as chief risk officers, chief audit executives and heads of assets.”
Why does the problem persist?
So yes, municipalities often do lack people, systems and institutional stability, says Gildenhuys. However he says that is precisely why the next question matters.
“Why does this problem recur so persistently, so widely and so structurally? Why has it survived wave after wave of reform, support programmes, turn-around plans and national interventions?
At some point, one has to stop asking only why municipalities are weak and start asking whether the system itself has been designed in a way that predictably produces weakness.”
This is where the mainstream story begins to unravel, he says.
The founder says: “Capacity” is usually spoken about as if it were a neutral concept, when it is not. “Capacity for what? Capacity to keep roads usable, run water schemes, collect refuse, maintain substations, process local permits and manage basic finance? Or capacity to comply with a dense web of national planning frameworks, procurement rules, reporting requirements, audit expectations, project coding standards, ERP systems, institutional mandates and central oversight routines?”
He argues that those are not the same thing. “A municipality may be capable of governing a small community at a basic but functional level, yet appear disastrously under-capacitated when measured against a national compliance architecture built around idealised or metropolitan assumptions.”
Municipalities’ right to govern
The company says this distinction matters because South Africa’s constitutional design for local government is more realistic than much of the system that later evolved around it. It says that Chapter 7 of the Constitution gives municipalities the right to govern, on their own initiative, the local government affairs of their communities.
“It also states that municipalities must strive to achieve the objects of local government within their financial and administrative capacity. That is a sober formulation. It assumes realism. It assumes limits. It assumes that municipal obligation and municipal capacity must be read together.”
Policy and administrative practice often move in the opposite direction
Yet SA's policy and administrative practice often move in the opposite direction, says Gildenhuys. He says that the country increasingly act as though every municipality must simultaneously be a developmental agency, an infrastructure provider, a welfare platform, a planning authority, a compliance machine, a financial control centre, a procurement institution and a technology-enabled reporting node of national standard.
“When municipalities fail to live up to that model, we call it a skills shortage. But what if the model itself is part of the problem?”
The business says that this is no longer merely an outsider’s critique. It says The 2025 discussion document on the review of the White Paper on Local Government asks whether South Africa created an overoptimistic “wall-to-wall” local government model, whether the system has become “relatively complicated and costly”, and whether a more differentiated or asymmetrical model is now required.
It also notes that more than 30 policy, legislative and regulatory reform processes are currently affecting local government, the company says.
An overbuilt local government model
That is a remarkable admission, Gildenhuys says. It means the state itself is beginning to acknowledge that the problem may not simply be weak municipalities, he adds.
“It may also be an overbuilt local government model that assumes too much administrative sophistication, too much institutional layering and too much technical uniformity across places that differ dramatically in revenue base, economic structure, settlement pattern and practical governing ability.”
Once that is accepted, the phrase “lack of capacity” begins to look less like a root-cause explanation and more like an official description of what happens when an overdesigned system collides with uneven local realities, he says.
“The municipal skills shortage narrative is politically useful because it places the burden of explanation on municipalities rather than on the system's architecture. It encourages technical remedies rather than structural reform. More training. More compliance. More oversight. More intervention. More support units. More central guidance. The beauty of this narrative, from the state's perspective, is that it never has to ask whether its own design choices are part of the reason municipalities keep failing.
Bureaucratic density versus seriousness
“But the deeper possibility is difficult to avoid. South Africa may have built a local government system that confuses bureaucratic density with seriousness, procedural complexity with accountability and standardisation with good governance. When such a system becomes too heavy for many municipalities to carry, it then interprets the result as proof that municipalities need even more supervision.”
That is the circularity at the heart of the debate, he says.
The company says the point is not that skills do not matter as they matter enormously. The point is that the standard diagnosis is incomplete because it focuses on the municipal operator and ignores the machine, it says.
“A poorly designed machine can even make competent operators fail. It can also create a perpetual market for support, consultants, systems, interventions and compliance specialists. That is why the real question is not whether municipalities need capacity. Of course they do. The real question is whether South Africa has built a local government model whose complexity is itself manufacturing the very incapacity it claims merely to observe.”
That is the conversation the country now needs to have honestly, Gildenhuys says.
Improving locations and contributing to local government
The property development sector greatly assists economic investment and growth including employment growth and can do a lot to improve locations and contribute to local government in the form of new infrastructure and increased rates and taxes, John Whall, the CEO of Heartwood Properties told "Independent Media Property" recently.
He said the sector has an excellent pool of professional architects and engineers and very capable construction companies, and developers who can deliver developments very efficiently. He said one of the constraints in the SA market is good available land, and the long-term capital that is required to take land from agricultural status to ready to be developed which can typically take a number of years.