Sustainable Municipalities: Fiscal Decentralisation and Sustainable Revenue Models

1. Context and background

The Municipal Edge and Future Cities Africa continue to convene critical dialogues under the 2026 White Paper on Local Government Series, aimed at shaping a capable, developmental, and financially sustainable local government system.

In November 2025, both organisations identified "Sustainable Municipalities: Fiscal Decentralisation and Sustainable Revenue Models" as a priority reform theme for South African Local Government. This was driven by persistent structural challenges in municipal finance, including weak own-revenue performance; over-reliance on intergovernmental transfers; misalignment between functions and funding; and rising service delivery demands without commensurate fiscal capacity.

The gazetting of the 2026 White Paper on Local Government affirms the urgency of these issues. Chapter 8 provides a comprehensive reform framework for municipal finance, reinforcing the need for fiscal decentralisation, revenue reform, and strengthened political and administrative accountability systems.

2. Purpose

The purpose of this webinar is to provide a strategic platform for unpacking and interrogating the municipal finance reforms proposed in the 2026 White Paper on Local Government. It seeks to bridge the gap between policy and practice by translating the principles of fiscal decentralisation, sustainable revenue models, and intergovernmental fiscal reform into actionable insights for municipalities and sector stakeholders.

The webinar further aims to stimulate a solutions-oriented dialogue on strengthening municipal financial sustainability, with a particular focus on enhancing own-revenue generation, improving the design and effectiveness of equitable share and conditional grant frameworks, and addressing long-standing challenges such as unfunded mandates.

Ultimately, the conversation is intended to contribute to building a more differentiated, resilient, accountable, and development-oriented local government finance system. By fostering informed engagement and collaborative thinking, the webinar will explore alignment of financial management practices with service delivery outcomes, restoring public trust, and advancing the broader vision of sustainable and capable local governance.

3. A policy shift towards sustainable Local Government Finance

Chapter 8 of the 2026 White Paper on Local Government introduces a system-wide rethink of municipal finance, anchored on:

• Fiscal decentralisation with accountability - Strengthening the fiscal role of municipalities within a coherent intergovernmental system and expanding financial autonomy while reinforcing accountability and oversight mechanisms.
• Finance follows function - Ensuring that functional assignments are supported by adequate funding and addressing long-standing unfunded and underfunded mandates.
• Diversified and sustainable revenue models - Enhancing own-revenue generation capacity, broadening the municipal revenue base beyond traditional sources and leveraging innovation, technology, and data to improve revenue performance.
• Reform of intergovernmental transfers - Reviewing the equitable share formula to better reflect service delivery realities, improving the design and effectiveness of conditional grants, and strengthening alignment between planning, budgeting, and implementation.
• Strengthening financial governance - Improving financial management, transparency, and accountability systems; and enhancing audit outcomes and public confidence in municipal finances.

4. Key strategic questions

The webinar will interrogate the following:

• How can fiscal decentralisation be implemented in a way that balances autonomy and accountability?
• What are the most viable strategies for expanding municipal own revenue in constrained economic environments?
• How should the equitable share and conditional grant frameworks be reformed to improve impact?
• What practical mechanisms can be used to eliminate unfunded mandates?
• How can municipalities strengthen financial governance and restore public trust?
• What role can technology, data, and innovation play in transforming municipal finance?

5. Expected Outcomes

Participants will:

• Gain a deeper understanding of municipal finance reforms in the 2026 White Paper on Local Government.
• Identify practical strategies to strengthen municipal revenue and fiscal sustainability.
• Explore innovative approaches to fiscal decentralisation and funding reform.
• Contribute to shaping a more resilient and accountable local government finance system.

6. Target Audience

Municipal Mayors, Speakers, Members of Municipal Mayoral Committees, Members of Executive Committees, Council Portfolio Committees, Municipal Public Accounts Committees, Municipal Councillors, Accounting Officers (City and Municipal Managers), Municipal Executive Management, Chief Financial Officers, Urban & Spatial Planning Practitioners, Planning-Budgeting-Reporting Practitioners, Supply Chain Management Practitioners, Internal Auditors, Engineers, ICT Professionals, Think Tanks, Professional Bodies, International Networks, Civil Society, Non-Governmental Organisations, Private Sector, Academia, Youth Leaders, Community Leaders, Development Agencies, etc.

7. Conclusion

Sustainable municipalities are the foundation of a capable developmental state. The reforms proposed in the 2026 White Paper on Local Government signal a decisive shift toward financial sustainability, accountability, and resilience.

However, the success of these reforms will depend on how effectively fiscal decentralisation is implemented, how revenue systems are strengthened, and how trust in municipal financial management is restored.

This webinar provides a timely and strategic platform to advance local governance reform agenda.