Reimagining Local Governance: The Vision and Strategic Pillars of the 2026 White Paper on Local Government

Platinum sponsor:
Business Engineering

Topics: White Paper on Local Government - Local Government Reform - Devolution - Municipal Finance - Differentiation - Professionalization - Implementation

This webinar provided the first detailed public engagement on the revised draft White Paper on Local Government - the most significant reform of South Africa's local government system since 1998. Panelists from COGTA, academia and a municipality shared the policy proposals, responded to critique, and offered a practical example of how one district is already positioning itself for the new dispensation.

The case for change

South Africa's 1998 White Paper was shaped by the optimism of a new democracy. Its assumptions no longer hold. The revised draft - built on 65 policy proposals across 11 chapters - is described by COGTA as a reality check: an honest assessment of what has worked, what has not, and what must change. The president's State of the Nation addresses in both 2025 and 2026 called explicitly for a reimagined local government system, with no holy cows.

Speaker contributions

Dr. Kevin Naidoo - Deputy Director-General, COGTA

Dr. Naidoo presented the full architecture of the revised draft White Paper, tracing the reform journey from its conceptualisation in July 2024 through to the current cabinet submission process. The document is expected to be published in the Government Gazette for public comment by mid-May 2026.

• The draft is structured around five pillars: system redesign and reform; clean and capable governance; a differentiated categorisation framework to move away from one-size-fits-all; partnership-based relational governance including a stronger role for traditional leadership; and financial and service delivery reform for greater viability.
• The golden thread running through the document is differentiation. The two approaches proposed range from a single-tier system with new municipal categories (requiring constitutional amendment) to a maintained two-tier system with a definitive differentiation framework.
• Nine key policy shifts are identified, including: from developmental local government to developmental governance; from cooperative governance as coordination to collective impact; from participation as process to partnering as practice; from good governance aspirations to integrity by design; and from paper-based administration to a digital backbone.
• The fiscal transfer to municipalities currently sits at 9.7% of nationally raised revenue, based on 1998 assumptions. The COGTA-SALGA funding model review found this needs to increase to between 17% and 18% to close the fiscal gap - with implications for transfers to other spheres.
• A dedicated transition management body will be established - initially for two years - to sequence, coordinate and monitor implementation. Where it will be housed (presidency, COGTA or a statutory body) is still being determined.
• A policy coordination clearing house will be created to prevent multiple departments from making conflicting or duplicative demands on municipalities simultaneously.
• Short-term reforms are targeted for 2026 to 2027; medium-term for 2027 to 2031; longer-term changes requiring constitutional amendments are planned post the next local government elections.

"There should be no holy cow. We must be as open and blunt as possible."

Prof. Mpilo Ngubane - Deputy President and Head of Professionalisation, Institute for Local Government Management (iLGM)

Prof. Ngubane offered a frank response to the 65 proposals on behalf of iLGM, which had submitted 72 proposals to COGTA - around half of which were incorporated. He welcomed much of the draft but identified several areas requiring further attention.

• 60% of the problems in local government are political in nature. Legislation alone cannot solve them - political parties must take responsibility for the conduct and quality of their elected representatives.
• Powers and functions: the schedules 4B and 5B of the Constitution need to go further. Concurrent functions - such as municipal clinics and health - create confusion for communities who cannot distinguish which sphere of government is responsible. One sphere should perform one function at local level.
• Legislation must not just be simplified - it must be reduced. Municipalities are expected to comply with over 300 pieces of legislation including bylaws. This focus on compliance crowds out service delivery.
• The policy coordination clearing house is strongly supported - but its first task must be to serve as a single data portal, so that national departments stop making separate, duplicative information requests to municipalities.
• Consequence management must be linked to external mechanisms. Internal disciplinary processes in municipalities are too easily circumvented. An independent body - analogous to the Judicial Service Commission - should oversee the recruitment of section 54A and 56 managers, with council retaining final authority.
• Municipal managers should be treated as directors-general: performance-based contract renewals without re-advertisement should be possible. Stability in the accounting officer position is a prerequisite for institutional continuity.
• On free basic services: the word "free" should be replaced with "affordable", with a minimum payment required. Completely free services reduce accountability and enable abuse of the indigent register.
• On VAT sharing: iLGM proposes exploring a model where municipalities retain a percentage of VAT collected in their area, similar to models in the United States - a potentially transformative own-revenue mechanism.

"The 1998 White Paper was the honeymoon phase. The 2026 White Paper is a reality check - we are in a real marriage now, and we need to be honest about what is working and what is not."

Dr. Johan Tesselaar - Program Manager, Office of the Municipal Manager, West Coast District Municipality

Dr. Tesselaar presented how the West Coast District Municipality (Weskus) has been proactively repositioning itself since 2022 in anticipation of the structural changes the White Paper may bring - offering a practical blueprint for how districts can add value rather than wait to be absorbed.

• Facing a declining grant-dependent funding base after losing its water services authority function, Weskus identified four options: use reserves (unsustainable), cut costs (limited scope), reduce staff (rejected), or develop new business opportunities. It chose the last.
• Six business opportunity pillars have been identified and are in various stages of development, including: regional economic corridor development, a shared services centre for local municipalities, an ICT and digital services offering, water security and waste management utilities, and a cruise and tourism economy built around the Atlantic coastline.
• Three strategic positioning pillars now guide Weskus: becoming a regional economic engine, operating a shared services hub for surrounding municipalities, and managing regional bulk infrastructure and utilities.
• Weskus has been shifting from a grant-dependent model to a blended revenue model - creating value-based income streams that reduce fiscal dependency while serving communities and local municipalities.
• The district's research identified three possible futures for districts under the White Paper: a regional powerhouse model, a hybrid differentiated model (Weskus's preferred scenario), or full abolition into a single-tier system. The message to other districts: strategise now or risk being absorbed.
• Weskus strongly supports the White Paper's move away from one-size-fits-all and argues that regional differentiation is essential for improved performance across South Africa's diverse municipal landscape.

"It is not whether reform will change things, but how far it will change them. Districts that add value will survive and possibly expand. Districts that do nothing will be absorbed."

Key takeaways for practitioners

1. The draft White Paper is open for public engagement. Once gazetted (targeted for mid-May 2026), all stakeholders are urged to submit inputs - particularly on areas not yet adequately covered such as gender equality, GBV, and post-1998 lessons learned.
2. Differentiation is the design principle. Municipalities, districts and provinces should assess how the new categorisation framework will affect their powers, functions and funding - and begin scenario planning now.
3. The fiscal gap is real and documented. The transfer increase from 9.7% to 17-18% of nationally raised revenue is not a wish - it is a finding of a formal study. Municipalities should track this work through the National Treasury fiscal framework review.
4. Legislation overload must be addressed from the top. The clearing house and the proposed reduction in legislative burden are critical enablers. Practitioners should document the compliance cost they currently bear.
5. Professionalization must go beyond training. Stable accounting officers, merit-based appointments and external oversight of senior recruitment are structural requirements - not aspirations.
6. Consequence management needs external anchoring. Internal disciplinary systems are insufficient. The link to independent oversight bodies must be made explicit in the final White Paper.
7. Districts should act now. The Weskus model shows that a proactive strategy - built on clear value propositions and new revenue streams - is the most effective hedge against structural uncertainty.

Moderated by Mr. Zolani Zonyane, The Municipal Edge.

Hosted by Mr. Dan Claassen, Future Cities Africa.

CPD points available - contact cpd@cigfaro.co.za