Minister Velenkosini Hlabisa: Cooperative Governance and Traditional Affairs Dept Budget Vote 2025/26, NCOP

Honourable Chairperson of the National Council of Provinces
Chairperson and Members of the Committee
Members of the Provincial Executive Committees
Honourable Members
Fellow Cabinet Members
Deputy Ministers of Cooperative Governance and Traditional Affairs
Chairperson of the National House of Traditional and Khoi-San leaders
Chairperson of the Municipal Demarcation Board and its members
President of the South African Local Government Association
Directors General of DCOG and DTA
CEO of MISA
Organised Labour – IMATU & SAMWU
Fellow South Africans
Ladies and Gentlemen

It is a great pleasure to present Budget Vote 3 of the Department of Cooperative Governance and Vote 15 of the Department of Traditional Affairs to this Honourable House. Our presentation today takes place under the heavy weight of grief and devastation. Just two weeks ago, our nation experienced one of the most heart-wrenching disasters in recent memory. As we all recall, on June 5, 2025, the South African Weather Service issued an Impact-Based Early Warning alert for parts of the country, indicating heavy rainfall, snow, and strong winds. In response, all provinces activated their contingency plans, putting disaster teams and fire rescue services on high alert. The Western Cape, Eastern Cape, Free State, and KwaZulu-Natal provinces were affected. Still, the Eastern Cape endured the greatest impact, suffering from torrential rains that unleashed widespread devastation. Districts such as Nelson Mandela Bay, Chris Hani, and OR Tambo bore the brunt of this catastrophe.

These floods did not merely wash away homes and infrastructure; they tore through the very fabric of families and communities. Families lost everything in a matter of hours. Sadly, over 100 South Africans – children, parents, and grandparents – lost their lives. Thousands more were left homeless, schools were submerged, clinics destroyed, and roads became rivers of despair. The pain is unimaginable. On behalf of the Ministry and the Departments of Cooperative Governance and Traditional Affairs, we offer our deepest condolences to every grieving family and to every person who has lost not only a loved one but also a sense of stability and hope. May their souls rest in peace

Due to the scale of loss and the need to unlock specific interventions, I authorized the National Disaster Management Centre to officially classify this catastrophe as a National Disaster. We are now urgently working to support the affected provinces and municipalities, not just with words, but with the resources they need to recover and rebuild. Funding mechanisms are being activated to ensure we can provide the necessary support. Technical teams have already been deployed through the Municipal Infrastructure Support Agent (MISA) to assess the damage to roads, bridges, water and sanitation systems, and other essential infrastructure.

G20 Presidency

This tragedy unfolds as South Africa is honoured to chair the G20 in 2025. Within that, we are leading the G20 Disaster Risk Reduction Working Group. Earlier this year, we successfully hosted the first technical meeting in KwaZulu-Natal, a province that itself knows the sting of disaster all too well. Next week, we will host the second technical meeting at the Sandton International Convention Centre in Johannesburg. Here, Member States and knowledge partners will gather to chart a path forward on global disaster risk priorities. The key focus areas of our Working Group include:

• Ecosystem-Based Approaches and Nature-Based Solutions for Disaster Risk Reduction
• Disaster-Resilient Infrastructure
• Disaster Recovery, Rehabilitation and Reconstruction

These focus areas are more than just abstract policy themes; they are lifelines for the future. They are the answers we seek when we ask: “How do we prevent the next floods from becoming a national tragedy? How do we become vigilant so that no child has to die because a scholar transport was washed away? How do we ensure communities bounce back stronger, not just survive?” In the spirit of Ubuntu, we will not face these challenges alone. Through the G20, we learn from the world and share our experiences.

Budget allocation

The allocated budget for Vote 3: Cooperative Government amounts to R410.9 billion over the MTEF period, with 96.7% earmarked for intergovernmental transfers and support to entities. This significant investment will enable us to implement critical initiatives that deliver tangible and measurable improvements in the lives of our people. For Vote 15: Traditional Affairs, the appropriated budget for 2025/26 amounts to R195,530 million, 24% (R46,927) of which is earmarked for transfer and subsidies, including a dedicated allocation for the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities, a Chapter 9 Institution.

Local Government review 

One of our key focus areas is the comprehensive review of the 1998 White Paper on Local Government, a crucial step towards a focused and fit for purpose local governance structures and that will result to efficient service delivery. This review is a testament to our collective commitment to addressing the challenges facing local governance and shaping a future that aligns with the aspirations of all South Africans. Launched on May 19, 2025, the review emphasises the need for local governments to adapt to a changing world characterised by urban growth, climate challenges, youth unemployment, and digital transformation, while embracing collaborations with traditional and Khoi-San leadership institutions.

This review significantly influences governance, community engagement, and socio-economic development. It reflects the government’s commitment to improving local governance and service delivery, which are vital for effective democracy and citizen satisfaction. We prioritise inclusive engagement by ensuring all voices, especially those historically silenced, are heard. We aim to provide marginalised groups, like informal traders, women, youth, traditional and Khoi-San leaders, and rural communities, with the opportunity to participate.

The review aims to create a modern local governance structure that fosters capable, ethical, and innovative municipalities, ultimately improving lives and strengthening democracy. We initially set a submission deadline of June 30, 2025, but in response to requests for more engagement, it has been extended to July 31, 2025. Our goal is to develop a responsive local government system that meets the needs of all South Africans and delivers quality services.

Targeted interventions

We have made progress in implementing targeted interventions in distressed municipalities. These interventions include infrastructure maintenance and development support, enabling municipalities to address basic service delivery backlogs in water, electricity, roads, and sanitation. We are also advancing critical policy and legislative reforms that lay the foundation for long-term stability and improved governance. Our interventions are guided by careful assessments of municipal needs, and we are committed to ensuring that our support is effective and sustainable.

Honuorable members, as you would know, the Inter Ministerial Committee (IMC) focused on municipal audit outcomes has prioritised ten (10) distressed municipalities for focused support and intervention and achievement of the following outcomes: (1) Outstanding debt resolution with Eskom and Water Boards; (2) Enforcing funded municipal budgets; (3) Improving governance structures and financial management; and, (4) Developing and implementing sustainable municipal turnaround strategies.

We reiterate that for us to make an impact in addressing the challenges at the local government sphere, we should eradicate working in silos as espoused by the District Development Model (DDM). The DDM remains our flagship intergovernmental planning, coordination and service delivery strategy. Through the DDM, we are bringing all three spheres of government around one table to address the specific challenges across the 52 spaces (districts and metros).

This past Monday, we, along with DDM Champion Minister Gayton McKenzie and Western Cape Local Government Minister Mr. Bredell, visited the Garden Route District in the Western Cape. This visit was an opportunity to engage with the district’s leadership, stakeholders, and communities, fostering honest dialogue and collaborative problem-solving to gain insight into the lived experiences of our people.

Budget strategy

Our budget strategy introduces a package of targeted and differentiated interventions, guided by careful assessments of municipal needs. We have identified 30 priority municipalities requiring support and intervention. Our focus areas include:

• The Municipal Infrastructure Grant (MIG) 6B will accelerate critical infrastructure projects, ensuring value for money. We have allocated R493.8 million to support this initiative in priority municipalities.
• Integrated urban development for growth nodes will enhance urban planning and infrastructure investments. To support these initiatives, we have reallocated R244.7 million from the MIG to the Integrated Urban Development Grant (IUDG).
• Strengthening municipal systems and the District Development Model (DDM) will enhance intergovernmental planning and budgeting. The Municipal Systems Improvement Grant (MSIG) will rise from R151.1 million in 2025/26 to R165.3 million in 2027/28, supporting municipalities in improving their systems.
• We’re finalising a municipal debt relief framework with the National Treasury to help municipalities manage debt and enhance financial sustainability.

Update on Municipal Demarcation

Honourable Members,

On 3 April 2025, I launched the Ward Delimitation Process in Mpumalanga, led by the Municipal Demarcation Board (MDB). This initiative includes public consultations across all provinces from April to June 2025 for independent ward delimitation. It is vital to respect the MDB’s independence and ensure the process remains free from external influence.

We urge all South Africans to actively participate in shaping their communities’ representation. The success of this process depends on broad community involvement and support from stakeholders, ensuring timely completion for the upcoming Local Government Elections.

Policy and legislative reforms

In our commitment to rebuilding and strengthening local government, we are pursuing a comprehensive agenda of policy and legislative reforms. These reforms are about restoring public trust, ensuring sustainability, and upholding the constitutional promise of dignity, equality, and service for all. Our legislative and policy priorities include:

• Independent Municipal Demarcation Authority (IMDA) Bill: This Bill, presently in the NCOP, proposes the establishment of a Demarcation Appeals Authority and prescribes provisions to deepen consultation with stakeholders and communities. The IMDA Bill will improve the demarcation process, ensuring it is fair, transparent, and accountable.
• Local Government: General Laws Amendment Bill: This Bill, which is currently being developed, aims to amend provisions in various local government statutes to address deficiencies and entrench good practices. This bill will also include amendments from the White Paper review process.
• Local Government: Municipal Structures Amendment Bill (also referred to as the Municipal Coalitions Bill): This Bill introduces a legislative framework to regulate the formation and functioning of coalitions, ensuring governance stability, predictability, and better planning. It addresses the instability caused by fragile coalition governments, which hinders service delivery.
• Intergovernmental Monitoring, Support, and Interventions (IMSI) Bill: This Bill provides a legislative backbone for coordinated, time-bound, and effective interventions when municipalities collapse. It ensures we can respond decisively and constitutionally to support distressed municipalities.

Additionally, we are working on:

• Professionalisation and Competency Frameworks in Local Government: Through this, we aim to redefine what it means to be a local government leader, with updated frameworks that clarify the skills required for senior managers and ensure professionalism, ethics, and service excellence.
• Municipal Prototype Staff Establishments and Remuneration Review: Chairperson, a diagnostic review revealed bloated staff structures and misaligned functions across municipalities. We are correcting this by implementing tailored prototype staff establishments linked to municipal capabilities and reviewing the remuneration of senior managers to attract skilled leaders and curb inefficiencies.

These reforms will help us build a capable developmental state, restore public trust, and ensure our municipalities deliver quality services to our communities.

Customary Initiation

The implementation of the Customary Initiation Act is progressing rapidly, with the Ministry focusing on safer practices. Provincial Initiation Coordinating Committees have been set up in all nine provinces to monitor processes and strive for zero casualties.

We developed the Regulations and consulted stakeholders, including traditional leaders, publishing them for public comment in October 2024. Our goal for the 2025/2026 fiscal year is to finalise these Regulations.

Addressing the commercialisation of customary initiation is a key challenge. The Act allows the Minister of COGTA to set fees for these practices. In the 2024/2025 financial year, the Department drafted Ministerial Determinations regarding these fees.

Consultations with stakeholders have ended, and the draft was published for public comment in March this year.

Traditional and Khoi-San Leadership Bill

The implementation of the Traditional and Khoi-San Leadership Act faced a legal issue when the Constitutional Court ruled that Parliament’s public participation process was flawed, declaring the Act unconstitutional and invalid. The Court suspended this ruling for 24 months to allow Parliament to make corrections.

Efforts to review the Act began during the 6th Administration, and we intended to table the Bill before the end of the 2024/2025 Financial Year. However, unforeseen circumstances delayed this process. We are committed to finalising and tabling the Bill in the 2025/2026 Financial Year. To facilitate this, we sought an extension from the Constitutional Court for the original deadline of 29 May 2025, and we are pleased to announce that the Court has granted an extension until 29 May 2027. We are optimistic that Parliament will meet this new deadline.

Their Majesties and Queens' Council

Following the establishment of the Government of National Unity (GNU), the Ministry of Cooperative Governance and Traditional Affairs (CoGTA) prioritised supporting traditional and Khoi-San leadership to enhance their community roles.

One key development was the creation of the Forum for the South African Majesties, which includes Kings, Queens, and Principal Traditional Leaders. This forum facilitates engagement with the government and stakeholders.

In March 2025, the forum established a Queens’ Council to support their Majesties and lead initiatives for social cohesion and socio-economic development within traditional communities.

I am pleased to announce that for the first time in 30 years, the Minister of Finance during the budget speech, pronounced that there will be an allocation towards supporting infrastructure for our Royal palaces. The Deputy Minister who is delegated the function, will lead the engagement with National Treasury to deal with modalities in line with the provisions of Section 30(2). (d) of the PFMA.

National House of Traditional and Khoi-San Leaders (NHTKL)

The NHTKL plays a vital role in highlighting the work and issues of traditional leaders, gaining recognition beyond South Africa’s borders. The Chairperson of the NHTKL has been elected as the first Chairperson of a new network focused on rallying rural communities and traditional leaders to combat drug issues. The Ministry and the House support this initiative to reduce substance abuse.

Additionally, the NHTKL aims to educate communities about the contributions of past Traditional Leaders. They will hold the Lenaka Memorial Lecture in November 2025 in the Northern Cape, focusing on Kgosi Tota, Kgosi Jantjie, and Kgosi Galeshewe, who united against colonial threats in the late 19th century. This outreach not only honours the past but also seeks to unite communities in addressing current social issues like drug abuse.

Commission for Khoi-San Matters (CKSM)

The Department is advancing the recognition of Khoi-San communities. Previously, applications for recognition submitted to the Commission for Khoi-San Matters (CKSM) were incomplete. To resolve this, the Commission conducts Applicant Member Investigations (AMIs) to help applicants accurately complete their forms. As of the closing date on 29 May 2025, about 220 applications have been received, with more possibly counted.

In the 2025/26 financial year, the Ministry will continue to support the Commission in finalising the AMIs and working toward recognising qualified applicants. It will also monitor the Commission to ensure that recommendations are made to the Minister within the shortest possible time. The Department, under the Ministry of CoGTA, remains committed to addressing Khoi-San matters effectively.

Conclusion

Chairperson, as I conclude our presentation, allow me to express our most profound appreciation to all stakeholders for consistently demonstrating their commitment to the principles of cooperative governance.

Chairperson, with a spirit of unity and purpose, I formally submit for consideration by this esteemed House Budget Vote 3 for the Department of Cooperative Governance, as well as Budget Vote 15 for the Department of Traditional Affairs for the 2025/2026 financial year.

Thank you