Latest news with #April2025
Yahoo
5 hours ago
- Business
- Yahoo
The Reciprocal Tariff Pause Ends in 11 Days -- Is a "Trump Dump" of Stocks Imminent?
Donald Trump's "Liberation Day" tariff announcements on April 2 were followed one week later by a 90-day pause on higher reciprocal tariffs tied to dozens of countries. Though tariff uncertainty is an undeniable headwind, the historical priciness of stocks may be a bigger worry. While historical precedent can act as a headwind for the Dow, S&P 500, and Nasdaq Composite over the short run, it's a clear ally of investors over extended periods. 10 stocks we like better than S&P 500 Index › Over multiple decades, no asset class has delivered a higher average annual return to investors than stocks. But despite this outperformance, it doesn't mean that Wall Street's major stock indexes get from point A to point B in a straight line. The first half of 2025 has been particularly volatile for equities. After the iconic Dow Jones Industrial Average (DJINDICES: ^DJI), benchmark S&P 500 (SNPINDEX: ^GSPC), and growth-powered Nasdaq Composite (NASDAQINDEX: ^IXIC) hit respective all-time highs between December 2024 and mid-February 2025, the Dow and S&P 500 dipped into correction territory, with the Nasdaq entering a full-blown bear market. During a one-week period in early April, the S&P 500 endured its fifth-largest two-day percentage drop in 75 years (-10.5%) and enjoyed its biggest single-session point gain in history. These wild stock market gyrations are the result of President Donald Trump's "Liberation Day" tariff announcements on April 2. Following the close of trading on April 2, Trump unveiled a 10% sweeping global tariff and implemented higher "reciprocal tariff" rates on dozens of countries that have historically carried adverse trade imbalances with America. This announcement is what precipitated the S&P 500's aforementioned 10.5% cumulative drop over two sessions. But in a surprise move, the president capitulated on April 9 by implementing a 90-day pause of these higher reciprocal tariff rates for all countries except China (a separate 90-day reciprocal tariff relief was reached with the world's No. 2 economy in May). This 90-day pause is what led to the respective largest single-day point gains in the history of the Dow, S&P 500, and Nasdaq Composite on April 9. There's just one 90-day reciprocal tariff pause window ends in 11 days. Is another "Trump dump" of stocks imminent? The 90-day window, which began at 12:01 a.m. EDT on April 10, will officially end at midnight when the calendar changes over to July 9. This will reintroduce substantially higher tariff rates for dozens of countries. Trump's tariff and trade policy comes with a number of unknowns. For instance, there's the possibility that tariffs could worsen trade relations with America's top trade partners, as well as incite anti-American sentiment in overseas markets toward U.S. goods. Another worry, highlighted by four New York Federal Reserve economists from Liberty Street Economics in "Do Import Tariffs Protect U.S. Firms?", is the lack of differentiation between input and output tariffs. Output tariffs are duties placed on finished goods brought into the country, while input tariffs apply to goods used to manufacture/complete finished products in America. Input tariffs can increase the domestic rate of inflation and weigh on corporate margins. But historical precedent is the true concern. When Donald Trump introduced tariffs on China in 2018-2019, the stocks directly impacted by the tariffs performed considerably worse than those unaffected by them on announcement days. We witnessed the adverse impact that announcement days can have on stocks on April 3 and April 4 of this year. Worse yet, the deleterious effects of tariffs on businesses lasted well beyond their initial announcement. Liberty Street Economics found that from 2019 to 2021, profits, employment, sales, and labor productivity, on average, fell for businesses directly impacted by Trump's China tariffs. While this doesn't intimate that a "Trump dump" is imminent, it does strongly lean toward negative future returns for stocks if this 90-day reciprocal tariff pause expires without any real resolution. There's no question that this rapidly approaching 90-day reciprocal tariff pause is important to the health of the U.S. economy and investors -- but it may not be Wall Street's biggest threat. Though President Trump inherited a bull market, he entered office for his nonconsecutive second term with stocks at one of their priciest valuations in history. Most investors rely on the traditional price-to-earnings (P/E) ratio as their measure of value when comparing stocks. This ratio, which divides a company's share price by its trailing-12-month earnings per share (EPS), tends to work great for mature businesses but can get tripped up by growth stocks and periods of recession where EPS plummets or turns negative. The S&P 500's Shiller P/E ratio, which is also referred to as the cyclically adjusted P/E ratio (CAPE ratio), does a better job of making apples-to-apples valuation comparisons on a back-tested basis. The Shiller P/E is based on average inflation-adjusted EPS over the prior 10 years. Shortly before Donald Trump was inaugurated, the S&P 500's Shiller P/E nearly touched a multiple of 39, which is its third-highest reading when back-tested to January 1871. It also represented a 125% premium to the average Shiller P/E multiple over a 154-year period. What's particularly worrisome about the Shiller P/E is how stocks have previously responded when surpassing and maintaining a reading of 30 for at least two months. Including the present, this scenario has occurred six times in 154 years. Following the five prior instances where the Shiller P/E topped 30, the Dow Jones Industrial Average, S&P 500, and/or Nasdaq Composite, eventually (keyword), shed 20% to 89% of their value. This is to say that premium stock valuations weren't tolerated over extended periods. Even if there were a reciprocal tariff resolution from the White House, stocks would still be historically pricey. When it comes to tariffs and pricey stock markets, history hasn't worked in favor of investors. But when examined with a wide lens (i.e., over multiple decades), there's no greater ally for investors than time and history. At any given point, there are always headwinds threatening to weigh down the stock market's major indexes. Geopolitical tensions between Israel and Iran, the end to the reciprocal tariff pause, climbing U.S. Treasury yields, and historically pricey stock valuations are just some of the potential downside catalysts at the moment. Although stock market corrections, bear markets, and even the occasional crash are inevitable, these events all share one thing in common: They're historically short-lived. The disproportionate nature of stock market cycles overwhelmingly favors investors with an optimistic long-term mindset. Shortly after the broad-based S&P 500 was confirmed to be in a new bull market in June 2023, the analysts at Bespoke Investment Group published a data set on X (formerly Twitter) that compared the length of every S&P 500 bull and bear market dating back to the start of the Great Depression in September 1929. Bespoke's data set covered 27 separate S&P 500 bull and bear markets. The 27 bear markets have averaged 286 calendar days in length, which works out to around 9.5 months. Further, none of these 27 bear markets extended beyond 630 calendar days. Meanwhile, the typical S&P 500 bull market has stuck around for 1,011 calendar days, or roughly two years and nine months. If the current bull market is extrapolated from June 2023 to present day, it means more than half (14 out of 27) of all S&P 500 bull markets since the Great Depression have lasted longer than the lengthiest bear market. Regardless of the short-term headwinds that stocks are working their way through, being optimistic and allowing time to work in your favor has historically been a moneymaking decision. Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $704,676!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $950,198!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 175% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The Reciprocal Tariff Pause Ends in 11 Days -- Is a "Trump Dump" of Stocks Imminent? was originally published by The Motley Fool
Yahoo
14 hours ago
- Business
- Yahoo
What Tariffs? Nasdaq, S&P 500 Climb to Record Highs as Netflix, Disney Continue Huge Runs
The Great Tariff Panic of 2025 that gripped Wall Street in April? It appears in the rearview mirror now, with the S&P 500 and Nasdaq closing at new all-time highs on Friday. A number of prominent media and tech companies have been riding the wave to fresh highs as well, with Netflix increasing 1.26% and closing at a company-record $1,323.12 per share on Friday — a day after setting its previous high mark. The streaming heavyweight's stock price is up 54% since early April. Disney, Warner Bros. Discovery, Fox Corp. and Paramount all made minor gains on Friday, continuing recent climbs that started following Wall Street's April downturn. WBD and Disney's shares are up about 50% since early April, while Fox Corp. and Paramount have both made roughly 20% gains since then. The S&P 500 jumped 0.52% and closed Friday at 6,173, surpassing its previous all-time high of 6,144, which was set in February; the tech-heavy Nasdaq, meanwhile, posted an identical percentage increase and closed at 20,273, topping its record high that was set last December. Amazon and Alphabet, Google's parent company, each gained more than 2% on Friday, while Apple closed slightly higher. Apple has mostly rebounded to where it was before President Donald Trump announced his 'Liberation Day' tariffs in early April — a plan that initially rocked Wall Street and shaved more than $500 billion from Apple's market cap in the days following his announcement. 'We're going to have a booming stock market for a long time, because we're reinvesting in the United States of America,' Trump said on April 4. That was not the case, at least at first, when the S&P 500 and Nasdaq took its biggest hits since COVID smacked the markets in 2020. The S&P 500 is now up more than 20% and the Nasdaq has surged 32% since the day after Trump's tariff plan was announced. On Friday, Trump addressed the upcoming July 9 deadline on the pause he put on his stiffest tariffs, during a press conference in which he lauded the Supreme Court for limiting nationwide injunctions against executive orders. The president said he was not too concerned about the deadline when asked about it by one reporter. 'No, we can do whatever we want,' Trump said. 'We could extend it. We could make it shorter.' The post What Tariffs? Nasdaq, S&P 500 Climb to Record Highs as Netflix, Disney Continue Huge Runs appeared first on TheWrap. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Digital Trends
a day ago
- Entertainment
- Digital Trends
Can we all just be normal about Clair Obscur: Expedition 33 for a second?
Whether or not it actually wins the award come December, Clair Obscur: Expedition 33 is the Game of the Year. No 2025 release has sparked so many long-lasting conversations usually reserved for tentpole releases like Grand Theft Auto or Zelda. It has been gaming's main character for months, standing in as a shining example of what a modern video game should rise to. Yet for all the mainstream conversations that it has generated, so few of them actually seem interested in Clair Obscur. Instead, Sandfall Interactive's critically acclaimed RPG has been submitted as evidence in on-going litigations against what gamers paint as a stale industry in need of new blood. While there are meaningful conversations to have about what game studios can learn from Clair Obscur's success, the way that it has been weaponized and reduced to a piece of confirmation bias in any landscape-shaping argument it fits into leaves me hungry for more substantial dissections of the games we love. Recommended Videos It was clear that Clair Obscur was going to be a big talking point when it launched in April to a wave of glowing reviews. Critics and fans hailed it as a generational RPG that revitalized turn-based combat, delivered an emotional story, and crafted an astonishing original world. 'Game of the Year' talk came fast, which is par for the course when a new game breaks the 90 mark on Metacritic. But the watercooler chats didn't stop there. Soon, mainstream conversations yearned to place it in a broader gaming landscape. Its originality was painted as a shining light in a sea of perceived 'AAA slop.' It wasn't just a good game, but a blueprint for how a boring industry could be saved. Even this very site opined about that immediately following its release. That over-the-top idea only ballooned as the months went on. Sandfall Interactive's slim team size became a talking point. Articles popped up that praised the studio for creating such an accomplishment with only 30 people — a figure that was quickly debunked once critics started adding up all the external developers involved. That didn't stop the disingenuous factoid from setting the stage at Summer Game Fest, where host Geoff Keighly used the number to sell the idea that he was presenting viewers the future of video games. Tons of trailers for smaller games followed, with Keighly often pointing out how many people made them as an indication of quality. My growing frustration with that trend reached a boil this week thanks to a different debate that Clair Obscur has been unwittingly roped into. For years now, some RPG enthusiasts have lamented the death of turn-based games. That anxiety seemed to come most from franchises like Final Fantasy and Dragon Quest experimenting with real-time action. Clair Obscur is a loud and proud turn-based game, which made it the perfect spoiler candidate for an industry abandoning a classic way of play. Never mind the fact that turn-based gaming hasn't gone away. Octopath Traveller 2, Like a Dragon: Infinite Wealth, and Metaphor: ReFantazio (a game that released just last year to similar praise) have all proved that major studios are still very much invested in the subgenre. And yet, the narrative persisted. It all came to a head during a Square Enix investors call, in which the company reaffirmed its commitment to turn-based games and acknowledged Clair Obscur's existence in the process. According to Automaton, those typical business responses were mistranslated and blown out into a larger story: Clair Obscur's success had convinced Square Enix to start making more turn-based games. Finally, the video game industry was saved. Mission accomplished! Every conversation like this is so riddled with holes that you couldn't get them across a puddle, yet they are inescapable. Fans want it to prove their long-standing theories about the video game industry right and treat its success like an irrefutable data point in every argument. It's not a new phenomenon either; this cycle tends to happen with lots of both successes and failures. Baldur's Gate 3 inspired a wave of talking points about what players actually wanted from games. That line of thinking was met with backlash from developers who cautioned against using a very specific win as a crusade. Black Myth: Wukong became a rejection of Western ideology. Concord was viewed as proof that live service games are dead. I both understand where this comes from, because I'm as guilty of it as anyone. It's fun to search for meta-narratives in the things we care about. I'm a football fan (go Pats) and I love nothing more than creating a story out of a Super Bowl matchup. This year's clash between the Kansas City Chiefs and the Philadelphia Eagles became more exciting to me when I viewed it as the Chiefs needing the win to finally prove they were every bit as good as the Tom Brady era Patriots, but they'd have to beat the giant killers who previously thwarted Bill Belichick at the big game. That added stakes to a matchup I wasn't invested in, even if it was imaginary. This sort of meta-breakdown of video games follows a similar line of thinking. Sandfall Interactive becomes the Eagles circa 2018 in this story. As harmless as that can be in small quantities, its forced nature has become unbearable when trying to navigate conversations around Clair Obscur. It's not enough for it to be a great game. It has to be a masterpiece. It has to be a counterpoint to everything we don't like. It has to be the savior of the RPG genre. What's ironic is that none of those hollow platitudes actually tell us anything about the game itself. Engagement with what Clair Obscur actually has to tell us has taken a backseat to imperfect armchair analysis. That's a shame, because there's meat on that bone. Clair Obscur asks us to think about how we, as a species, push on in the face of mass grief. It's a story of sacrifice, where expedition after expedition fights in the face of extinction. Many die for that cause, but their sacrifices aren't in vain. Each one helps the next party get a little closer, asking us to rethink success and failure in the context of long-term collective action. It's a thematic cousin to Death Stranding and its sequel, games that stress the importance of human connection as a means of making the world easier to navigate in times of crisis. Perhaps that's just as much a reason why Clair Obscur is resonating with players as the fact that it's turn-based or made by an indie studio. There's a familiar trauma in it, as the fictional Gommage and its impact on the world can be connected to the Covid-19 pandemic. We just went through – and are still going through – a period of mass suffering. Those wounds are fresh. I still remember seeing the pop-up morgues on the streets of Brooklyn. I remember watching the infection rates fall and then spike again, ripping any hope I had for an ending from me. I remember how hopeless it all felt. But I also remember how many people put in hard work to stop it together. Even if some people refused to do their part, many masked, stayed home, kept six feet apart, and anything else they could to stop the spread. It was a collective effort built on selfless sacrifice. I feel all that fueling Clair Obscur's emotional resonance. It begs to be discussed, because what is the point of something being a generational classic if we take nothing else from it? One of the only meaningful conversations I've had about Clair Obscur came before it was out. I had been playing it alongside our reviewer, Tomas Franzese, at the time and we dissected its themes together in isolation. We both cooled on it significantly in Act 3, taking issue with its sudden pivot into a meta-reflection on the nature of art and its role as an escape from grief. It felt like a betrayal on its more human focus earlier on; a needless swerve into a piece of art evaluating its own importance. It was a memorable discussion that helped crystallize where I felt Clair Obscur worked best and where it ultimately fell apart. I hope that discussions like that become more common as the hype settles down. Just as I felt turned off by the 'art about art' pivot in Act 3, I am similarly bored by the tedious talk about how Clair Obscur is changing the industry. None of it does anything to honor Sandfall Interactive's vision, even if it is designed to gas the studio up. Real engagement comes from critics like Ian Walker and Kenneth Shepard, who respect the game enough to interpret what it has to say. It comes like podcasts like Girl Mode that aren't afraid to criticize where the story is ineffective. If you love Clair Obscur, really talk about it. Not what it represents, but the actual game in front of you. If you find that you don't have nearly as much to say about it as you do its influence, maybe it's worth questioning whether you love the game or just the idea of it.
Forbes
a day ago
- Business
- Forbes
How Lenders Can Prepare For A Renovation Boom
Mike de Vere is CEO of Zest AI. Forget the house hunt—America is picking up the hammer instead. With mortgage rates stuck between 6% and 7% and many homeowners locked into low rates from the pandemic years, they're choosing to stay put and invest in where they are. Today's housing market isn't about expansion, it's about transformation—fueling what some experts anticipate could be a 5% gain in remodeling activity in 2025. And who can blame them? Home prices keep rising. The median home-sale price in the U.S. as of April 2025 was $414,000, according to the National Association of Realtors (NAR). That's an all-time high for the month of April and marks the 22nd consecutive month of year-over-year home-price increases, according to Bankrate. It's no wonder people are thinking, 'Why buy new when we can improve what we already have?' At the same time, budgets are tight. With inflation still biting, rising unemployment and a staggering 70% of Americans living paycheck to paycheck, homeowners are looking for smarter, more affordable ways to borrow. Enter home equity lines of credit (HELOCs): cost-effective lifelines that can offer quick access to cash when it's needed most. And with summer here—the busy season for home projects—the race is on. Currently, there is about $35 trillion in nationwide home equity, with 30% of banks and 62% of credit unions citing home equity loans as a high priority in 2025. The question isn't whether demand exists, but whether financial institutions have the agility to capture it responsibly. In this high-stakes season, only the lenders that can move quickly, adjust intelligently and make confident decisions will win, all without compromising risk. The Cost Of Sitting On The Sidelines In Uncertain Times In times like these, playing it safe is playing to lose. Lenders who delay updating their strategies risk not only missing out on market share but also letting down the communities they serve. The most successful institutions aren't the ones that slam the brakes on lending when times get tough. They're the ones who have their hands on the steering wheel, adapting intelligently to maintain control over policies and make quick adjustments. These institutions are especially prepared to tackle surging demand, especially during peak seasons. Artificial intelligence (AI) in lending isn't new. Machine learning underwriting models have been helping lenders make smarter, more efficient decisions for years, but what lenders need from AI today is very different than even just a few years ago. What's critical now is actual performance, intelligence with actionable insights, transparency and ongoing monitoring. • Do we have enough intelligence to make impactful changes, confidently? • Do we have inherent and direct control over our policies and cutoffs? • Can we take action quickly, or are we slow movers who adjust policies after delinquencies emerge? • Are our credit and risk teams empowered by meaningful data and model performance? • Do we have the kind of deep intelligence that allows us to plan, not just react? AI-powered lending solutions are helping answer these questions, increasing loan processing efficiency by up to 70% in some cases, while providing the insights needed for strategic decision-making. This isn't just about speed, it's about responsible lending that protects both institutions and borrowers. In this economy, intelligent agility is your superpower. AI is a tool that can help unlock it. A Checklist For Lenders For Renovation Season With renovation season heating up, lenders need more than speed. They need smart, swift decision-making. Here's lenders' three-step renovation season gut check: Check your agility: How quickly can you adjust lending policies when conditions change? Go beyond the basics: Do your tools provide actionable insights beyond basic approval/denial decisions? Scale with confidence: Is manual underwriting slowing you down? Can AI-automated underwriting help you make more accurate, consistent decisions at scale? Institutions that nail this trifecta won't just weather the storm, they'll be positioned to thrive during the coming renovation surge. In today's economic roller coaster, control is your seat belt. However, not every lender has the tech horsepower or in-house data scientists ready to build a safe and sound ride. Instead, they can consider partnering with companies to access tools like AI-automated underwriting, lending intelligence and fraud protection. These AI tools can help maintain portfolio health while extending responsible financing options to homeowners looking to upgrade their nests. The Path Forward: Balancing Caution With Opportunity Let's be real: 2025 won't be smooth sailing. Overly cautious? You'll leave opportunities unexplored and customers underserved, while inadequate risk assessment jeopardizes institutional stability. Not cautious enough? You'll invite risk. But lenders who balance this caution with clarity will be set to come out ahead. For lenders committed to serving their communities responsibly through uncertain times, the message is clear: Equip your team with tools that enable quick, confident decision-making. Your institution's resilience and your customers' financial well-being depend on it. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Mail & Guardian
2 days ago
- Business
- Mail & Guardian
Why a review of the White Paper on Local Government matters
Local government are elected to provide services, but many struggle to do this. Photo: Delwyn Verasamy In April 2025, the department of cooperative governance and traditional affairs released a discussion document on the review of the 1998 White Paper on Local Government. The latter was a bold and necessary step in South Africa's democratic journey. Its main aim was to redefine and establish municipalities as development engines capable of delivering basic services and driving social and economic development. Yet, as the past 27 years have shown, its assumptions and prescriptions have not fully aligned with the complex realities facing municipalities and their residents. The persistent failures of local government are not merely technical glitches; they reflect deeper structural, financial and governance challenges. Therefore, a critical review of the White Paper is not just a bureaucratic exercise but a matter of urgent national importance. For millions of people, municipalities determine whether they have water, electricity, decent roads and a healthy and dignified life. They are the foundation upon which inclusive development, social justice and democratic legitimacy rest. A central problem facing local government is the widespread failure to deliver basic services consistently. Many are financially distressed and some argue this distress is rooted in the very assumptions and structural arrangements articulated in the Revenue One key assumption was that municipalities would be able to raise enough revenue to fund the bulk of their operational expenditures. It was anticipated that municipalities would finance 90% of their recurrent costs, including salaries, repairs, maintenance and other daily operating expenses, using their own revenue streams, such as property rates and service charges. In other words, the remaining 10% would be funded by national transfers. This assumption underpinned the funding model for local government. It implied a local government model that is financially self-sufficient and capable of meeting its constitutional developmental mandates. But years of evidence have shown that this model was overly optimistic — if not fundamentally flawed. Municipalities in rural or economically marginalised areas struggle with their revenue collection because ratepayers can't or won't pay. The former is linked to high unemployment and poverty levels, while the latter could be attributed to administrative weaknesses. Apart from the metros, debt collection rate ranges from an average of between Many rely heavily on intergovernmental transfers that are insufficient to cover operational and capital needs. The over-reliance on property rates and service charges has also exposed deep inequalities, with wealthier urban municipalities faring better than rural municipalities that remain trapped in a cycle of underfunding and As such, the anticipated 90% self-funding benchmark is a structural revenue shortfall that remains elusive in many municipalities with cascading effects on service delivery, infrastructure maintenance, and overall governance. The inability to generate adequate revenue has direct consequences for service delivery. Countrywide, people face persistent water shortages, unreliable electricity supply, deteriorating roads, and poor waste management. Problems with governance It is no secret that many municipalities suffer from chronic governance problems, such as the lack of accountability, political instability and infighting, cadre deployment, poor consequence management, and skills shortages. Back in 1998, the White Paper envisaged professional, accountable local administrations; instead, many councils today are beset by instability, political interference and a lack of technical expertise. This undermines both strategic planning and day-to-day operations. The funding model has inadvertently entrenched spatial and economic inequalities. Affluent municipalities with a stronger revenue base can deliver better services and maintain their infrastructure, while poorer municipalities continue to lag further behind. This perpetuates the legacy of apartheid-era spatial planning and undermines the goals of equitable development and developmental local government. For the average person, the failures of local government are not abstract policy issues; they are realities that shape daily lives. In short, the effectiveness of local government is a 'litmus test' for the health of the country's democracy. When municipalities fail, people pay the price, and the consequences are immediate and profound: Dysfunctional municipalities deter investment, hinder local businesses and restrict job creation, thereby exacerbating poverty and inequality. Without reliable municipal services, people are forced to use unsafe water sources and makeshift sanitation, with dire health implications. Power outages, potholes and crumbling infrastructure disrupt livelihoods, hinder economic activity and erode public trust. Poor waste management and inadequate environmental health services expose people to disease and environmental hazards. When local government is seen as corrupt or incompetent, it undermines legitimacy and trust, social cohesion and fuels disillusionment with democracy itself. Differentiated approach It is clear that the White Paper must be comprehensively reviewed and reformed. This moment also creates an opportunity to rethink the local government funding model critically. A re-imagined national policy on developmental local government must take seriously the funding model that is supposed to bring it to life. A differentiated approach is needed, one that recognises the local government history, the diverse capacities and contexts of municipalities. This may require increased and better-targeted national transfers, especially for poorer municipalities, alongside innovative approaches to local revenue generation. Such approaches may typically include a review of the Intergovernmental Fiscal Relations Framework to pursue a truly equitable sharing and allocation of revenue raised nationally. Reforming local government through a revised White Paper must also be part of a broader strategy to address spatial and economic structural inequalities. This must include targeted investment in infrastructure, support for local economic development and measures to expand the municipal rate base over time. But improving municipal governance will require both political will and systemic reforms that seek to professionalise local government and strengthen oversight mechanisms to root out corruption. Appointing skilled, qualified officials — rather than prioritising comradeship or political loyalty — must become the norm. This will go a long way toward strengthening local governance and accountability. As we look to the future, we must learn from the past, confront uncomfortable truths, and forge a new consensus on municipalities' role, funding, and functioning. This will go a long way in ensuring that all municipalities are 'fit for purpose' and capable of addressing the ever-evolving needs for all effectively. Dr Lungelwa Kaywood is a local government specialist and postdoctoral fellow in the Chair in Urban Law and Sustainability Governance at the Faculty of Law at Stellenbosch University.
