South Africa's failing municipalities have been a significant drag on the national and local economies for over a decade. Major economic hubs like Johannesburg, which accounts for R16 of every R100 produced in the country, face gradual decline, ultimately affecting national GDP growth. The country's 257 councils exhibit common failures, including weak financial management and revenue collection, failure to maintain infrastructure, and ineffective supply chain management.
A report by the Department of Co-operative Governance and Traditional Affairs, led by Minister Velenkosini Hlabisa, highlights the entrenched lack of consequence management in local government. The report reveals that North West is the most errant province, with the largest balance of unauthorised, irregular, and fruitless and wasteful expenditure. The national balance of such expenditure rose to R268.13bn, up from R264.10bn the previous year, with minimal recovery of these amounts.
The report shows that municipalities rely more on write-offs than recovering the money or disciplining those responsible. North West carried the largest balance of any province, at R71.14bn, up from R66.97bn. Gauteng, the Eastern Cape, and the Free State followed, with balances above R40bn. In contrast, the Western Cape had the smallest balance nationally, falling from R3.52bn to R2.77bn.
The consequences of municipal failure extend beyond municipal accounts, with South Africa's landfills requiring billions of rands to overhaul. The Western Cape provincial government is preparing an application to access at least R3.1bn from the budget facility for infrastructure to address waste-management infrastructure backlogs. The province is also seeking advisers to help prepare the application, citing resource constraints.
A 2014 study found that significant amounts of waste were disposed of at landfill sites in the Sedibeng and West Rand regions. The Western Cape faces increasing pressure on its waste management infrastructure due to population growth, urbanisation, and rising waste generation. Many municipal landfills are approaching capacity, while others require significant improvements to meet compliance standards.
Gauteng's Infrastructure South Africa is also seeking transaction advisers to prepare bankable projects for six municipalities looking to repair their deteriorating waste management infrastructure. The province's waste management system is under strain, with several landfill facilities approaching design capacities. The six participating municipalities include Emfuleni Local Municipality, Lesedi Local Municipality, and Rand West City Local Municipality.
The establishment of disciplinary boards in municipalities has increased, with 178 municipalities having a board established in 2024/25, up from 147 the previous year. However, the number of financial misconduct allegations reported fell from 1,116 to 614, while the number of officials formally charged with a financial offence rose 56% to 313.
Key points
- South Africa's municipalities face significant financial and governance challenges.
- Unauthorised expenditure by municipalities rose to R268.13bn.
- The country's waste management infrastructure requires significant overhaul.
