South Africa’s National Treasury has unveiled the Metro Trading Services Reform programme, a major initiative aimed at overhauling the management of essential services in the country’s eight metropolitan municipalities. The programme seeks to shift how metros deliver key trading services—such as water, wastewater, electricity, and refuse removal—by encouraging them to operate these services more like integrated, self-sustaining businesses.
The reform addresses long-standing challenges in municipal capacity, including infrastructure failures, unreliable service delivery, financial stress, and declining public confidence over the past decade. National Treasury highlighted that many metros struggle with revenue collection and reinvestment in essential infrastructure, contributing to broader economic and social issues. The initiative forms part of a wider package of local government reforms outlined in the 2026 budget and aligns with Operation Vulindlela efforts to drive economic growth and attract investment.
Recent budget trends illustrate the problem. In Johannesburg, the city plans to spend only 1.7 million rand on water-related services while expecting to generate 11.9 billion rand in water revenue. In Mangaung Metro in the Free State, the city intends to allocate 9.6 billion rand to water and sanitation services, against expected water revenue of 1.4 billion rand in the 2024/2025 financial year. Treasury argues that these patterns reflect decades-old financial management practices that divert funds away from infrastructure maintenance and upgrades.
Under the Metro Trading Services Reform, participating metros will establish a single unit of management accountability for core trading services. Revenues generated from these services will be ring-fenced and reinvested directly into maintaining and improving them. The programme offers performance-linked incentives, with government mobilising just over 50 billion rand in funding—around 27 billion rand available over the medium term—to support reforms. Metros will need to raise matching funds and meet self-set performance targets in their Improvement Action Plans to access the incentives. Treasury expects the changes to unlock over 100 billion rand in total investment in water, sanitation, electricity, and waste infrastructure across the metros.
Metropolitan municipalities, through their association, have welcomed the proposed reforms but stressed the importance of protecting council authority. They emphasised that any structural adjustments to governance or financing must not erode the decision-making power of elected councils, describing it as a significant concern raised regularly by politicians. Cities have also sought clarity on how national processes intersect with local responsibilities.
The announcement comes amid ongoing political pressures in some metros. In Johannesburg, the country’s largest municipality, the mayor recently survived a removal attempt. An ANC deployee stated that no formal communication had been received regarding any recall decision, adding that the party remains focused on delivering commitments. The deployee criticised actions taken by party comrades in Johannesburg, noting that internal structures would address challenges while affirming the mayor’s position remains intact.
The reform targets South Africa’s eight metros, which serve a substantial portion of the population and are central to national economic growth. National Treasury has collaborated closely with cities and other government departments to design the programme, positioning it as an incentive-driven approach rather than punitive measures to encourage sustainable service delivery and financial stability.