Democratic Alliance leader Geordin Hill-Lewis announced a new policy on Saturday, 8 August 2026, to ringfence municipal revenue generated from water and electricity services. The proposal, revealed during the party’s local government election manifesto launch at Mary Fitzgerald Square in Johannesburg, aims to ensure that funds paid by residents for utilities are strictly reinvested into essential infrastructure maintenance.
The policy serves as a direct response to the widespread practice in South African municipalities where revenue from trading services is often diverted into general operational budgets. This practice frequently leaves local authorities unable to pay for critical infrastructure upgrades, such as pipe repairs or the maintenance of electrical substations.
Addressing Infrastructure And Mismanagement
Hill-Lewis stated that the measure is intended to stop the historical leakage of funds into projects unrelated to service delivery. He noted that the party’s goal is to prevent these funds from disappearing into bloated salary structures or failing under the weight of corrupt contracts.
“Every rand collected for water will be protected for water. Every rand collected for electricity will be protected for electricity. Your money will no longer be treated as a political slush fund.”
He added: “It must be used to repair pipes, maintain substations and replace cables. It must never disappear into big salaries, political projects or corrupt contracts.”
National Pressure On Municipalities
The proposed policy arrives as several municipalities across the country face mounting pressure from national entities, including Eskom and the Department of Water and Sanitation, to secure revenue for service delivery. Debt crises and failing grids have previously led to threats of service restrictions from national departments when local governments fail to prioritise utility-related spending.
By ringfencing these funds, the party hopes to establish a fiscal buffer that protects services from the volatility of general municipal cash flows. The 2026 local government elections are scheduled to take place on 4 November 2026, with this policy expected to feature prominently in the party’s campaign platform.
It remains to be seen how such a policy would be implemented across diverse municipal legal frameworks if the party wins power, and whether existing debt obligations would allow for immediate ringfencing in high-debt councils. We will monitor the progress of this policy ahead of the November polls.