Local government support bodies in South Africa are reporting high levels of spending and performance, but municipalities continue to face significant challenges in delivering basic services and addressing financial and governance issues. According to a briefing held by parliament's portfolio committee on co-operative governance and traditional affairs, key local government entities, including the South African Local Government Association (Salga) and Municipal Demarcation Board (MDB), provided updates on their performance. The briefing highlighted the ongoing struggles of municipalities despite reported progress.
Salga reported a 99% target achievement rate, with 86 out of 87 targets achieved in the 2025/26 period. The organization also reported total expenses of R994m. However, 39 municipalities remain financially distressed and are receiving support in areas such as audits, revenue, risk management, and oversight structures. This support aims to help these municipalities address their financial challenges and improve their overall performance.
Salga also reported that approximately 6,400 councillors and officials were capacitated during the year, indicating a focus on building the skills and capacity of local government leaders. This investment in capacity building is seen as crucial in helping municipalities to effectively deliver services and address the challenges they face.
The MDB, another key local government entity, reported spending R104.34m against revenue of R79.450m, resulting in a R24.89m deficit. The deficit was funded from the MDB's accumulated surplus. Despite this, the MDB achieved only 82% of its targets, falling short of its performance goals.
The MDB's audit outcome also regressed, moving from a clean audit in 2024/25 to an unqualified opinion with material findings in 2025/26. The findings related to financial misstatements and non-compliance involving procurement, financial reporting, and asset disposal. This regression in audit outcomes raises concerns about the MDB's financial management and governance.
KwaZulu-Natal has the highest number of recorded litigation challenges on demarcation, spanning three separate matters. These challenges involve several municipalities, including eThekwini Metropolitan Municipality, Mkhambathini Local Municipality, Inkosi Langalibalele Local Municipality, Alfred Duma Local Municipality, and uKhahlamba Local Municipality. These litigation challenges highlight the complexities and disputes that can arise in the demarcation process.
The ongoing challenges faced by municipalities in South Africa underscore the need for continued support and intervention. While local government support bodies report high levels of performance, the persistence of financial and governance issues in municipalities highlights the complexity of the challenges they face. Addressing these challenges will require sustained efforts from government, support bodies, and municipalities themselves.
Key points
- 39 municipalities in South Africa remain financially distressed despite support from local government entities.
- Salga reported a 99% target achievement rate, with 86 out of 87 targets achieved in the 2025/26 period.
- The MDB's audit outcome regressed, moving from a clean audit in 2024/25 to an unqualified opinion with material findings in 2025/26.
