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In establishing the first municipalities under the 1996 Constitution, South Africa decided to experiment with a decentralised system which gave local governments the same status as national and provincial governments. Together with responsibility for public services and local development, local governments were required to find solutions for the problems of poverty and social inequality inherited from the apartheid system. The city of Durban provides an example of the way in which this challenge has been met. The Durban Metropolitan Council benefïts from an existing local powerbase and the financial resources to define its own development policy and is using these to position itself, if not as the regulator, at least as the most important player in the local economy. In the context of South Africa’s decentralisation, there is a serious risk that much of the nation’s financial resources might be diverted to the “autonomous” cities.