Minister Velenkosini Hlabisa: Extended EXCO Retreat

Programme Director,
Deputy Minister of CoGTA, Dr Namane Masemola,
Director-General of DCoG, Mr Mbulelo Tshangana,
The CEO of MISA, Ms Pati Kgomo,
Group Executive: Infrastructure Delivery at the Development Bank of Southern Africa, Mr Chuene Ramphele,
Senior Managers,
Ladies and gentlemen.

Good day, and Compliments of the New Season.

Allow me to begin with a sincere expression of gratitude. We meet here at the start of a year that will shape the trajectory of local governance for a generation. We have come to the Magaliesberg not merely for an administrative retreat, but for reflection, recalibration, and renewed resolve. These moments of quiet away from Pretoria grant us the clarity to look honestly at where we stand, and the courage to decide where we must go.

We carry into this year both the weight of our constitutional mandate and the expectations of communities who judge us not by policy language but by the livedrealities of service delivery. Their hopes for safe water, for reliable infrastructure, for ethical leadership are not abstract. They are personal, immediate, and deeply human. Our work must honour those expectations.

Let me first acknowledge the progress the Department has achieved. After nearly a decade during which our audit outcomes fluctuated and instability took root, DCoG has secured unqualified audit opinions for two consecutive years, 2023/24 and 2024/25. This marks a decisive shift away from qualified opinions and disclaimers that had once eroded confidence in our stewardship. These gains are material; they demonstrate strengthening internal controls, disciplined oversight, and our teams’ commitment to rebuilding credibility. They also echo the broader call in the Auditor-General’s national assessments for ethical leadership and reliable reporting across the local sphere.

Yet even as we celebrate progress, we must confront the pattern that emerged in our quarterly performance last year. Quarter 2 signalled momentum; Quarter 3 showed regression. That inconsistency is not a technical issue; it is a leadership issue. This morning, we reported to the President on the portfolio’s performance; in doing so, we reflected the collective performance of every senior leader in this room. Our accountability is intertwined. In a year of national significance, stability and reliability must be the rhythm of our work.

Two national processes will define the pressure and the opportunity before us. The first is the comprehensive review of the 1998 White Paper on Local Government, the most far-reaching re-examination of the local government system since democracy. The Discussion Document was published in April 2025, inviting submissions from across society. The Portfolio Committee has welcomed this “seminal review”, recognising that much has changed since 1998, and that the gap between legislative intent and lived municipal performance must be closed. The Department’s national consultation process, including the CoGTA–National Business Initiative roundtables and the dialogues with communities, business, and youth, underscored a simple truth: our municipalities operate in conditions dramatically different from those envisioned almost 30 years ago.

Urban populations have surged; financial distress has deepened; coalition dynamics have destabilised councils; disasters driven by climate change have intensified; and infrastructure networks once designed for small populations now strain under the weight of millions. The White Paper review acknowledges this reality. It invites us to rebuild the foundation, governance, institutional arrangements, financial sustainability, and community participation with honesty, courage, and foresight. It is not a marginal update to a dated document; it is a generational reset.

Our responsibility here is profound. This review must culminate in a revised White Paper by March 2026, a blueprint that will guide the next 30 years of local governance. Not simply what municipalities are supposed to be, but what they must become: stable, ethical, professionally managed, financially sustainable, and capable of providing the services that anchor human dignity.

But let us be clear: policy does not change a nation unless leadership changes practice. The words in the new White Paper will matter only insofar as the men and women in this room give them life.

The second national process shaping our work is the 2026 Local Government Elections. The Independent Electoral Commission is already well advanced in its preparations, with significant progress in voter registration, political party compliance, and operational planning. The timeframe we are working within is defined by law: councillors’ terms conclude on 1 November 2026, and elections must be held between 2 November 2026 and 30 January 2027. The Commission has indicated that the official election date is expected to be announced in August 2026.

One of the most significant instruments in this reform suite is the Intergovernmental Monitoring, Support and Interventions (IMSI) Bill, introduced to Parliament in April 2025. It aims to strengthen the constitutional mechanisms in sections 100 and 139 by introducing early-warning systems, clearer definitions of executive obligations, uniform intervention procedures, and formalised administrator mandates. It also responds to long-standing challenges, poor oversight, inconsistent interpretation of rules, and resistance by councils, which have weakened interventions across 24 provinces and 217 municipalities. The Bill offers a strategic shift: interventions must no longer be reactive, unpredictable, or contentious; they must be timely, constitutional, and focused on restoring service delivery. Parliament’s processing includes referral to the National House of Traditional and Khoi-San Leaders, ensuring constitutionally required consultation.

The challenges facing municipalities are most starkly illustrated in the areas of water and sanitation.Our role as CoGTA is not to supplant the work of the Water and Sanitation sector, but to ensure that the governance, planning, and oversight instruments under our mandate compel coherent, intergovernmental action. The Integrated Regulatory Information System provides real-time dashboards on water system performance. Under the District Development Model, those dashboards must be matched with technical support, MIG allocations, and MISA deployments. That is how policy becomes remedy.

We must confront financial sustainability with equal seriousness. The Auditor General’s analysis shows that unfunded budgets, weak supply chain controls, and persistent irregular expenditure remain chronic barriers to municipal performance. Fiscal mismanagement is not merely an accounting failure; it is a service-delivery failure. When money leaks, taps run dry; when budgets are not credible, infrastructure collapses; when oversight is weak, corruption thrives. The General Laws Amendment Bill’s proposed integrity enhancements, clearer definitions of political office-bearer roles, and improved transparency requirements are essential to turning this trajectory around.

We must also address coalition instability as a governance risk. The Committee’s instruction for a consolidated Coalition Governance Bill is timely and essential. Coalitions must be structured, principled, and predictable; they cannot be transactional arrangements that destabilise councils and undermine service delivery. As municipalities enter an electoral year in which hung councils are likely to increase, we must be prepared with templates for coalition agreements, capacity-building for councillors, and legislative tools that safeguard budgets and planning.

Let me turn to disaster risk, an area where climate change has intensified our vulnerability. In June 2025, catastrophic floods struck four provinces, leading to widespread destruction and the tragic loss of over 100 lives. Recently, a disaster occurred in Mpumalanga and Limpopo. The National Disaster Management Centre classified the events as a national disaster. These events were not isolated; they reflect the global trend of climate-driven shocks. Under the DDM, we must build resilience through risk mapping, early-warning integration, stronger municipal capacity, and infrastructure designed for climate realities. Planning for resilience is no longer an option; it is a duty.

And as we address these pressures, we must keep an eye on the deeper currents shaping our water security. South Africa’s raw water availability is under strain from urbanisation, high non-revenue water, pollution, and climate change. This has been underscored by national water leadership, which has pointed to the need to diversify our water mix through groundwater, desalination, reuse, and infrastructure modernisation. Local government plays a central role in this diversification, and our planning must reflect that responsibility.

So, what is expected of us, here, now, in this retreat?

We must lead with a rare combination of humility and determination. Humility to admit what has not worked; determination to change it. Leadership is not about defending past mistakes; it is about designing future successes.

We must recognise that the White Paper review offers us a generational opportunity to redesign the system, and that the elections offer us a national moment to demonstrate credibility. And we must take seriously the message from the Auditor-General: leadership at the top determines performance throughout the chain.

We must be the coherence we seek to build.

Let me propose the posture we must adopt.

First, we must work with discipline. Reform succeeds not through ambition but through consistency, meeting deadlines, enforcing standards, and following through on commitments. For example, I have decided to decline processing a belated submission that has been reported as submitted late for urgent consideration and signature.

Second, we must work with courage. Turning around failing municipalities often requires difficult conversations, difficult decisions, and sometimes difficult interventions. The IMSI Bill gives us the instruments; we must supply the will.

Third, we must work with unity. The DDM has taught us that fragmentation is costly. Departments, provinces, municipalities, and entities must plan and act as one state.

Fourth, we must work with dignity. How we lead shapes how the public experiences government. Ethical leadership builds trust, and trust is the currency of governance.

Colleagues, the people of South Africa are not asking for miracles. They are asking for municipalities that work. They are asking for stability, professionalism, integrity, and fairness. They are asking for the basics, delivered reliably and respectfully. And that, more than anything else, is within our power.

Let us be guided by the quiet power of responsibility. Let us recommit to service, to integrity, and to the hard work of rebuilding a local government system worthy of our democracy. Let us shape a legacy that will endure long after our tenures end.

Every municipality must work. Every community must feel the presence of a state that cares. And every leader in this room must be the reason that happens.

Thank you.

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