National Treasury, led by Minister Enoch Godongwana, on 29 September hosted a well-attended engagement session with the mayors of South Africa’s metropolitan municipalities. The discussions centred on reforms to strengthen trading services at metros, with the Minister emphasising that years of underinvestment in water, electricity, and sanitation have left cities struggling to support growth and attract investment.
The session, attended by metropolitan mayors and mayoral committee members responsible for infrastructure and finance, focused on reforms aimed at restoring and sustaining essential municipal services, namely electricity, water, sanitation, and waste management. These reforms are being developed with national departments including COGTA, DWS, DEE, DFFE, DHS, as well as SALGA and metropolitan municipalities.
National Treasury has introduced a six-year, R54 billion performance-linked incentive grant as a core instrument of the reform. This is supported by targeted technical assistance to help improve accountability and financial transparency within metros for the performance of trading services. With the requirement for metros to match R1 of incentive funding with R1 of their own in trading services investment, the incentive grant represents an important change in conditional grants to ensure efficiency, leverage and impact.
The reform aims to significantly increase investment in infrastructure, enhancing service delivery and inclusive economic growth, through institutional and financial restructuring. All mayors welcomed the proposed reforms and pledged their support. They agreed that these initiatives are a critical step toward addressing the persistent challenges faced by most municipalities. The mayors also emphasised the importance of deploying the right skills and capable personnel to ensure effective implementation and long-term sustainability of services in metros.
In her presentation, Intergovernmental Relations Deputy Director-General Ms Ogalaletseng Gaarekwe noted that turning around trading services requires tackling deep-rooted structural issues, including fragmented accountability, limited financial transparency, and weak governance. These failures, she said, have eroded management capacity and must be addressed for reforms to succeed.
Deputy Minister Ashor Sarupen closed the session by stressing that metros must first meet minimum planning and accountability requirements before accessing the incentive. This includes establishing a single point of accountability for each trading service and developing credible turnaround and investment plans based on sound financial modelling. The session formed part of a broader series of stakeholder engagements aimed at building consensus and ensuring effective implementation of the reforms.METRO TRADING SERVICES REFORM FOR INCREASED INFRASTRUCTURE INVESTMENT AND IMPROVED SERVICE DELIVERY