President Cyril Ramaphosa has warned against the state of municipalities across the country, declaring much of local government “in crisis” while urging urgent reform.
Addressing a meeting between the national executive and the Free State provincial government on Friday, Ramaphosa struck a careful balance between praise and stark reality: progress is visible, but the system underpinning it is faltering.
“To put it quite bluntly,” he said, “across much, if not most of the country, local government is in crisis.”
Ramaphosa positioned the Free State as a critical engine for jobs, investment and national recovery.
The numbers tell a troubling story. By 2025, 35 of South Africa’s 257 municipalities were officially classified as distressed, with nearly two-thirds at risk of failure.
In the Free State alone, seven municipalities have already been placed under administration.
Ramaphosa pointed to a toxic mix of underfunding, weak revenue systems, capacity shortages and corruption as key drivers of collapse, warning that failing municipalities erode not only service delivery, but public trust itself.
“When there are weaknesses or failings at local government, it isn’t just service delivery that suffers,” he said.
“We are alive to the realities and to the magnitude of this problem. Underfunding, lack of capacity, high debt and struggling revenue generation models are just some of the challenges.
“At the same time, many municipalities are practically paralysed by poor governance, financial mismanagement and corruption”.
Yet the President’s message was not without optimism.
He commended the Free State government, led by Premier MaQueen Letsoha-Mathae, for what he described as a “future-facing and outcomes-driven” agenda, highlighting youth employment programmes, agricultural expansion and township economic revival.
The province’s 89.33% matric pass rate, the second highest nationally, was also praised, alongside strong performance in infrastructure spending and job creation initiatives that reached over 46,000 beneficiaries.
Crucially, Ramaphosa framed the Free State as a strategic economic hub with untapped potential: a central logistics corridor, a key agricultural producer, and an emerging player in renewable energy and manufacturing.
“The Free State is uniquely positioned to be at the heart of our country’s economic growth story,” he said.
But unlocking that potential, he stressed, depends on fixing the foundations.
Government is now moving to overhaul the local funding model, introduce ring-fenced utilities for water and electricity, and consult on a new White Paper on Local Government—all aimed at stabilising municipalities and restoring investor confidence.
With the South Africa Investment Conference looming next week, Ramaphosa signalled that reform is no longer optional, it is urgent.
“Restoring the fortunes of local government must be at the centre of our efforts,” he said.
kamogelo.moichela@iol.co.za
IOL Politics
