Your municipal water and power payments may soon be ring-fenced

Money you pay your municipality for water and electricity would have to go towards maintaining those networks before it is spent on anything else, under the Revised White Paper on Local Government that President Cyril Ramaphosa launched in Ekurhuleni on 22 October (SAnews).

"Going forward, revenues from the sale of electricity and water will be ring-fenced and used to maintain infrastructure before anything else," Ramaphosa said (SAnews).

A White Paper is government policy, not law. Several of the proposals will need new legislation, and some may need constitutional amendments, which the President said should be considered where necessary (SAnews).

What does ring-fencing mean for your bills?

Today many municipalities pool service revenue with their other income. Ring-fencing would keep water and electricity money tied to the pipes, substations and treatment plants that deliver those services, so maintenance stops being something that only happens after a breakdown (SAnews).

The White Paper does not set new tariffs. Ramaphosa said residents who can afford to pay for services should do so, and that municipalities must earn that through reliable services and proper use of public money (SAnews).

"We cannot build our way out of failure if we do not maintain what we have already built," he said (SAnews).

Why is government doing this now?

Municipal finances are under severe strain. Municipalities owe Eskom more than R120 billion, and many are also behind on payments to water boards (SAnews).

The policy also points to ageing infrastructure, maintenance backlogs, skills gaps and weak consequences for poor performance as reasons services keep failing (SAnews).

What else changes for water and electricity?

The White Paper proposes (SAnews):

• Separating the body responsible for a service (the service authority) from the one that actually delivers it (the service provider)
• Compulsory licensing for all water and electricity providers
• Stronger regulation of both services, alongside more support for struggling municipalities

Will all municipalities have the same powers?

No. Government wants to drop the one-size-fits-all model and match each municipality's powers to its size, capacity and performance. Functions a municipality can't handle could move to another sphere of government or be delivered regionally, and partnerships or concessions could be used where appropriate (SAnews).

Funding would also be differentiated. Cooperative Governance Minister Velenkosini Hlabisa said treating a metro like a small rural municipality when allocating resources "is missing the point" (SAnews).

What about political appointments?

The policy pushes for municipal staff to be appointed on merit rather than through political deployment (SAnews). Ramaphosa said there must be consequences when public money is stolen or procurement is manipulated, regardless of anyone's political standing (SAnews).

When will this happen?

Hlabisa said the next step is a 90-day Local Government Transition Plan setting priorities, responsibilities and timelines. It will take into account the new council term after the 4 November 2026 local government elections, including inducting newly elected councillors (SAnews).

Cabinet has endorsed a phased rollout, overseen by a time-bound Local Government Transition Management Body led by CoGTA, the Presidency and National Treasury (SAnews).