The 9 best and worst run municipalities in South Africa
Treasury has released its state of local government finances and financial management report for the fourth quarter of the 2015/16 financial year, detailing how the country’s municipalities spend taxpayers money.
The report reviews the state of municipal budgets and expenditure as well as municipal governance issues at the end of a particular financial year in order to:
- Identify areas of risk in local government finances so that appropriate policy responses can be developed.
- Identify those municipalities that are in financial distress so that processes can be initiated to determine the full extent of their financial problems and whether a municipality requires support.
Explanation of results
In order to determine the correct use of budgets, the report looks at 8 different categories including how much money the municipality uses to meet its operating expenditure requirements; overspending and under-spending of allocated budgets; how many debtors owe money to the municipality and the municipalities’ ability to generate its own funds.
The report then graded the categories on a 1-3 scale and tallied the total to an amount out of a possible 24.
- 1 – Good
- 2 – Fair
- 3 – Poor
- ≥16 – a municipality shows signs of distress (receiving a score of 3 in more than 4 of the 8 indicators listed in the tables below)
Performance of metros
| Municipality | Cash coverage | Cash Balances | Reliance on Capital Grants | Overspending operational | Underspending Capital | Debtors Growth | Debtors own revenue (%) | Creditors Cash (%) | >=16 |
|---|---|---|---|---|---|---|---|---|---|
| Nelson Mandela Bay | 2 | 1 | 2 | 1 | 2 | 1 | 3 | 1 | 12 |
| Ekhuruleni | 1 | 1 | 2 | 1 | 2 | 1 | 3 | 1 | 11 |
| Johannesburg | 2 | 1 | 1 | 1 | 1 | 1 | 3 | 3 | 12 |
| Tshwane | 3 | 1 | 2 | 1 | 1 | 1 | 3 | 3 | 15 |
| eThekwini | 2 | 1 | 2 | 1 | x | 1 | 3 | 3 | 12 |
| Cape Town | 1 | 1 | 2 | 1 | 2 | 1 | 3 | 1 | 11 |
| Buffalo City | 1 | 1 | 1 | 1 | 2 | 1 | 3 | 1 | 10 |
| Mangaung | 2 | 1 | 1 | 1 | 2 | 3 | 3 | 1 | 13 |
Worst performing municipalities
| Municipality | Cash coverage | Cash Balances | Reliance on Capital Grants | Overspending operational | Underspending Capital | Debtors Growth | Debtors own revenue (%) | Creditors Cash (%) | >=16 |
|---|---|---|---|---|---|---|---|---|---|
| Nketoana (FS) | 3 | 3 | 3 | 3 | 3 | 2 | 3 | 1 | 21 |
| King Sabata Dalindyebo (EC) | 3 | 3 | 3 | x | 3 | 3 | 3 | 1 | 19 |
| Emfuleni (GT) | 3 | 1 | 3 | x | 3 | 3 | 3 | 3 | 19 |
| Maluti-a-Phofung (FS) | 3 | 3 | 3 | x | 3 | 3 | 3 | 1 | 19 |
| Impendle (KZN) | 2 | 3 | 3 | 2 | 2 | 3 | 3 | 1 | 19 |
| Ba-Phalaborwa (LIM) | 3 | 3 | 3 | x | 2 | 2 | 3 | 3 | 19 |
| Thabazimbi (LIM) | 3 | 3 | 3 | x | 3 | 3 | 3 | 1 | 19 |
| Ditsobotla (NW) | 3 | 2 | 3 | x | 3 | 2 | 3 | 3 | 19 |
| Ngaka Modiri Molema (DC) | 3 | 1 | 3 | 2 | 3 | 3 | 1 | 3 | 19 |
Best performing municipalities
| Municipality | Cash coverage | Cash Balances | Reliance on Capital Grants | Overspending operational | Underspending Capital | Debtors Growth | Debtors own revenue (%) | Creditors Cash (%) | >=16 |
|---|---|---|---|---|---|---|---|---|---|
| Mthonjaneni (KZN) | 1 | 1 | 2 | x | x | 1 | 1 | 1 | 7 |
| West Coast (DC) | 1 | 1 | 1 | x | x | 3 | 1 | 1 | 8 |
| Swartland (WC) | 1 | 1 | 1 | 2 | x | 2 | 1 | 1 | 9 |
| Cape Winelands (DC) | 1 | 1 | 1 | 2 | x | 2 | 1 | 1 | 9 |
| Overberg (DC) | 2 | 1 | 1 | x | x | 3 | 1 | 1 | 9 |
| Intsika Yethu (EC) | 2 | 1 | 3 | x | x | 1 | 1 | 1 | 9 |
| Phokwane (NC) | 1 | 1 | 1 | 1 | x | 2 | 3 | 1 | 10 |
| Saldanha Bay (WC) | 1 | 1 | 1 | x | 2 | 1 | 3 | 1 | 10 |
| Central Karoo (DC) | 2 | 1 | 1 | x | 3 | 1 | 1 | 1 | 10 |
Read: ANC mayor buys R1.1 million luxury SUV in municipality on the verge of financial collapse
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