Ramaphosa Calls for Urgent Municipal Reforms to Unlock Local Economies at LED Summit 2026

President Cyril Ramaphosa has issued a strong call for urgent governance reforms at municipal level, warning that persistent failures in local government are undermining service delivery and holding back economic growth across South Africa.

Delivering the keynote address at the National Local Economic Development (LED) Summit 2026 at the Birchwood Conference Centre, the President said structural weaknesses in municipalities are directly constraining economic opportunities for citizens and businesses alike.

Governance Failures Impacting Daily Life and Business

Citing findings from the Auditor-General's report, Ramaphosa highlighted deep-rooted challenges within local government, including:

• Weak financial management and poor revenue collection

• Failure to maintain critical infrastructure

• Ineffective supply chain systems

• Irregular and wasteful expenditure

• Lack of accountability and consequence management

"These challenges translate into unreliable electricity, water insecurity, poor roads, poor service delivery and unsafe trading environments," the President said, stressing that these failures are felt daily by communities and enterprises.

'Fix Governance to Fix the Economy'

Ramaphosa made it clear that governance reform is essential to unlocking economic potential at the local level.

"Without fixing governance, we cannot fix service delivery, and without fixing service delivery, we cannot unlock local economic development," he said, urging stakeholders to move from diagnosis to solutions.

The President positioned the LED Summit as a platform not just for discussion, but for actionable reforms that can revitalise local economies.

Infrastructure Crisis: A Major Bottleneck

A key concern raised by the President was the chronic underinvestment in infrastructure maintenance by municipalities.

While National Treasury guidelines recommend allocating 8% of asset value to maintenance, many municipalities are budgeting less than 1%, leading to deteriorating infrastructure and service disruptions.

This gap, he warned, is exacerbating backlogs and weakening the foundations of economic activity.

Call for Investment and Revenue Reforms

To address these challenges, Ramaphosa called for:

• Improved municipal revenue collection systems

• Greater accountability in financial management

• Increased mobilisation of private sector investment

• Proactive leadership by municipalities in resolving service delivery constraints

He emphasized that municipalities must take ownership of their role as enablers of economic growth.

Four Key Action Areas for Reform

Outlining his proposed roadmap, the President highlighted the need to:

1. Unblock service delivery constraints, especially in basic infrastructure

2. Strengthen governance and accountability mechanisms

3. Improve financial sustainability and revenue systems

4. Create enabling environments for business growth

Infrastructure as the Foundation of Growth

Ramaphosa stressed that reliable infrastructure is critical to economic development, pointing to energy, water, transport, and logistics as key enablers.

"Energy security, water provision, roads and rail lines are the foundation of growth," he said, adding that national progress in areas like load shedding and logistics must now translate into tangible improvements at the local level.

Municipalities as Engines of Economic Activity

The President also underscored the role of municipalities in creating conducive conditions for businesses, particularly in industrial zones and township economies.

"Municipalities must ensure that industrial parks have the power they need and that township businesses have streetlighting to trade safely beyond daylight hours," he said.

Turning Policy into Action

The address signals a renewed focus by the South African government on strengthening local governance as a pathway to economic recovery and inclusive growth.

With municipalities at the frontline of service delivery, the success of these reforms will be critical in unlocking investment, creating jobs, and improving quality of life.

As deliberations continue at the LED Summit, the emphasis remains clear: transforming local governance is essential to unlocking South Africa's economic potential.