Johannesburg: President Cyril Ramaphosa has called for urgent reforms to unlock local economies, warning that poor governance at municipal level is undermining service delivery and stifling economic growth.

According to South African Government News Agency, President Ramaphosa delivered the keynote address at the 2026 National Local Economic Development (LED) Summit at the Birchwood Conference Centre, where he highlighted how persistent failures in local government are directly affecting economic opportunity. He referenced the Auditor-General’s report, which points to ongoing weaknesses that undermine service delivery and constrain local economic development.

The President outlined several key shortcomings, including weak financial management, inadequate revenue collection, infrastructure neglect, ineffective supply chain management, and irregular, wasteful expenditure. These issues, he noted, result in unreliable electricity, water insecurity, poor roads, and unsafe trading environments, all of which are felt daily by citizens and businesses.

Stressing the non-negotiable nature of governance reform, President Ramaphosa emphasized the need to fix governance to improve service delivery and unlock local economic development. He urged summit attendees to shift the discussion from problems to solutions.

Highlighting the issue of chronic underinvestment in infrastructure maintenance, he pointed out that many municipalities fall short of national Treasury guidelines, which require budgeting 8% of the carrying value of property, plant, and equipment, with many budgeting less than 1%.

The President called for improved revenue collection and the use of private investment to address infrastructure backlogs, insisting that municipalities must lead in resolving service delivery constraints.

President Ramaphosa proposed four sets of actions, starting with unblocking service delivery constraints at the local government level, particularly concerning basic infrastructure. He underscored the importance of reliable energy, water, and transport systems as the foundation of economic growth, urging the summit to translate national progress into local success.

Furthermore, he insisted that municipalities ensure conducive conditions for business operations, emphasizing that they must be at the forefront of resolving infrastructure issues to support local economic activities.