This book explores the concept and practice of intergovernmental fiscal relations in South Africa, with particular reference to capacity building towards assisting municipalities and improving their readiness to implement the Municipal Finance Management Act (MFMA). The main purpose of the research project is to investigate the readiness of South African Local Government structures in implementing the Municipal Finance Management Act (MFMA), to evaluate successes and challenges so far, as well as to sketch a way forward with regard to the further capacitation of municipalities in order to assist them to implement the MFMA successfully in the medium to long term. The study employs both qualitative and quantitative methods of data collection, including secondary sources, which comprise government (departmental) reports and policy documents, National Treasury MFMA circulars, as well as library books and journal articles. The primary sources used are survey questionnaires from municipal managers and interviews with officials of the National Treasury, North West Provincial Treasury, and the Department of Local Government and Housing.