Zuma said the management of municipal spaces for "radical social and economic transformation" requires municipalities to do a few things.
"They must radically transform the residential areas by connecting and integrating places of work and human settlements to build an inclusive economy and sustainable human settlements," said Zuma.
"They must work hard to raise the living standards and quality of life of all the people in the municipal area."
The President said at the centre of a municipality’s social transformation activities must be the provision of social protection to the vulnerable; in particular women and children, the eradication of poverty, and the building of social cohesion and social solidarity.
"A municipality’s objective must also be to turn the tide against the current spatial patterns of apartheid in the next five to fifteen years, though better and coordinated land use management, ensuring that a new built environment and inclusive spatial landscape emerges across the country," said Zuma.
"They must include effective public transport infrastructure development, as well as new integrated and sustainable human settlements and post-apartheid cities that are more connected, liveable, smart and green."
He said the renewal of old towns, inner-city regeneration as well as township renewal must be a key focus of municipalities.
"They must revitalise and mainstream township economies by supporting the development of township enterprises, co-operatives and SMMEs that will produce goods and services that meet the needs of township residents," Zuma said.
"Township entrepreneurs must be used to produce food such as bread for school nutrition and hospitals, clothes for school and police uniforms, and furniture for government offices.
"If we do this, we would bring millions of township residents into the mainstream of the economy, hence the need to revamp economic infrastructure and improve these areas."
Zuma recalled how in this year’s State of the Nation Address he emphasised that "we are building a South Africa that is free from poverty, inequality and unemployment, as guided by the National Development Plan (NDP)".
He said this goal requires stronger collaborations and changes in the implementation of the Back-to-Basics programme.
Zuma, however, admitted that "there is a lot we should do to build better municipalities and ensure that our people’s experience of local government is a pleasant one".
He said that is what "this summit is all about. We must all ensure that when people visit municipal offices, they return home smiling because of an excellent service they would have received".
Earlier, Zuma had lamented the hanging of anti-apartheid hero.
"We meet today on an important day on which we commemorate the tragic execution of Solomon Mahlangu by the apartheid state in 1979. He was a dedicated freedom fighter who paid the supreme price for fighting for the liberation of our country and its people.
"On this solemn occasion we recall his last words: 'My blood will nourish the tree that will bear the fruits of freedom. Tell my people that I love them. They must continue the fight'."
"The execution of the young Solomon Mahlangu provoked widespread international outrage. Today, in his honour the fight continues, this time to accelerate economic transformation and improve the lives of our people."
Welcoming new municipal officials, Zuma said: "As this is the first time since the last local government elections that we meet formally, let me welcome our newly elected and returning councillors and thank them for availing themselves for national service.
"I would like to congratulate all municipalities - councillors and municipal staff – who have made a difference in changing peoples’ lives and living conditions.
"But before we consider the challenges going forward, let us reflect on the achievements and progress we have made over the last two decades in changing people’s lives and living conditions."
According to the latest General Household Survey of Statistics South Africa, the progress achieved between 2002 and 2015 includes an increase from seventy-seven percent to eighty five percent in the number of households with access to electricity.
"We achieved an increase from eighty five percent to more than ninety percent of households with access to piped water. Also, the share of households obtaining sanitation services went up from sixty-two percent to eighty percent.
"At the time of the survey more seventy eight percent of South African households lived in formal dwellings, followed by 14 percent who lived in informal dwellings, and seven percent in traditional dwellings."
Zuma said 14 percent of South African households were living in RDP or state-subsidised dwellings. In addition, eighteen percent female-headed households received a government housing subsidy, while 12 percent of male-headed households received a government housing subsidy.
"It must be mentioned that South Africa’s population during this period, also increased from about 40 million in 2001, to about 55 million in 2015, and our people are living longer thanks to our improved health services among others," Zuma said.
"Although we can be proud of the above achievements we still must confront a number of challenges. I will mention just a few.
"We have a high number of households without access to piped water. We have bad roads, poor quality in some of our RDPs, a crumbling water infrastructure and poor sewage systems in some areas. We also face poor financial management in some municipalities and insufficient revenue collection."
He said there was still poor interaction between Councillors and communities in some municipalities.
"We are aware of these challenges and affected municipalities should work harder and faster to correct them, which is why we come together as we are doing this week.This summit aims to provide strategic direction for the new term of local government."
Zuma, who called for improved services, also took the opportunity to explain the government's "radical socio-economic transformation" plan.
"Let us remind ourselves what we mean by radical socio-economic transformation. We mean the fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans, especially the poor, the majority of whom are African and female," said Zuma.
"We need to see radical socio-economic transformation in local government."
Among those who attended were Deputy Speaker of the National Assembly, Minister of Cooperative Governance and Traditional Affairs and other ministers, deputy ministers, MECs, the Chairperson of South African Local Government Association (Salga), mayors and municipal leadership, Chairperson of the House of Traditional Leaders and Traditional Leaders present.
African News Agency