Nelson Mandela Bay 22, October 2026 - The Nelson Mandela Bay Business Chamber has welcomed the emphasis on local government reform, infrastructure investment and improved financial accountability in Finance Minister Enoch Godongwana’s Medium-Term Budget Policy Statement, stressing that the real test will be whether these commitments translate into reliable services, a more enabling business environment and renewed economic growth.
The additional R21.8-billion allocated to the local government equitable share over the medium term, alongside reforms aimed at strengthening municipal financial management, is a positive step towards addressing mounting pressures on municipalities. However, increased allocations alone will not resolve the systemic challenges undermining service delivery.
“The additional funding and proposed financial reforms are important, but their success will ultimately depend on whether municipalities can translate these interventions into better governance, more disciplined spending and tangible improvements in service delivery,” says Jeremy Dobbin, Economist at the Nelson Mandela Bay Business Chamber. “Public funds must be managed responsibly, with clear accountability for how they are spent and what they deliver.”
For businesses in Nelson Mandela Bay, reliable water and electricity, functioning sanitation, maintained roads and efficient municipal services are fundamental requirements for investment, operational stability and job creation. Persistent service delivery failures increase business costs, discourage investment and weaken the metro’s competitiveness.
“Municipal service delivery is an economic issue, not simply an administrative one. When essential infrastructure fails, businesses face additional operating costs, productivity is affected and the metro becomes less attractive to investors. Municipal reform must therefore be measured by its impact on the operating environment and the economy,” Dobbin says.
The temporary fuel levy relief announced in response to rising global oil prices is also welcomed as a necessary intervention to ease cost pressures on businesses and households. Fuel costs feed directly into transport, logistics, manufacturing and the distribution of goods, placing additional strain on already pressured operating margins. While the relief offers short-term support, sustained economic recovery will require structural measures to reduce the cost of doing business and create a more predictable operating environment.
The Budget’s focus on productive infrastructure investment and greater private sector participation is equally important. The Chamber supports efforts to accelerate infrastructure projects through improved project preparation and public-private partnerships. However, investment must be matched by effective procurement, maintenance and oversight. Infrastructure funding must address critical backlogs and strengthen the reliability of services on which businesses and communities depend.
“The emphasis on infrastructure investment and public-private partnerships is encouraging, provided projects are well planned, implemented efficiently and supported by sound maintenance programmes. The priority must be to address critical infrastructure gaps and improve the reliability of municipal services. Funding that does not translate into functioning infrastructure will not deliver the economic benefits the country needs,” Dobbin says.
The proposed modernisation of the Municipal Finance Management Act is a further opportunity to address weaknesses in municipal budgeting, revenue management and accountability. Requiring genuinely funded budgets, strengthening oversight and enabling earlier intervention in financially distressed municipalities are important steps. These reforms must be implemented decisively to curb wasteful expenditure, address financial misconduct and ensure that infrastructure maintenance budgets are not sacrificed to fruitless and irresponsible expenditure.
Improving revenue collection, including through the wider rollout of smart meters, is also critical to restoring municipal financial sustainability. Municipalities must collect revenue fairly and consistently, manage costs responsibly and reinvest income from water, electricity and waste services into the infrastructure that sustains them. This must go hand in hand with protecting vulnerable households and improving the quality of services delivered to paying customers.
“Financial sustainability requires municipalities to strengthen revenue collection while ensuring that expenditure is controlled and service delivery obligations are met. Residents and businesses need confidence that payments for essential services contribute to maintaining and upgrading the infrastructure they depend on. Better financial management must go hand in hand with visible improvements in service quality,” Dobbin says.
The Chamber calls for urgent and accountable implementation of the measures outlined in the Budget Policy Statement, with progress measured not only by allocations and policy reforms, but by improved municipal performance, reliable infrastructure, stronger investor confidence and sustainable job creation.
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Issued by:
Sibongile Dimbaza
Communications Officer