Government

This is the worst-run municipality in South Africa

Luke Fraser

 ·8 Aug 2026

Maluti-a-Phofung Local Municipality in the Free State has been named the worst-run municipality in South Africa.

This is according to the FW de Klerk Foundation Local Government Report Card 2026, which tracks the consequences of a municipality’s failure.

It said that these fires start in public spaces and enter private homes, appearing as dry taps, overflowing sewers, unsafe roads, a collapsing electricity network, or a community that is ignored.

“The Constitution does not treat municipalities as minor administrative outposts, but as a distinct sphere of government with obligations of their own,” said the foundation.

It noted that municipalities exist to translate public authority and public money into public value, with the 2026 report card examining how 50 local municipalities are meeting Constitutional standards.

The top three municipalities in the rankings are in the Western Cape, with Swartland (score of 90), George (87.5), and Stellenbosch (86) local municipalities taking the top spots.

However, at the other end of the table is the Maluti-a-Phofung Local Municipality in the Free State, which scored an incredibly low 24.0, with the municipality still heading in a negative direction.

The municipality is close to the Drakensberg mountains and covers over 4,000 square kilometres. Its economy relies primarily on agriculture and tourism.

The foundation said that Maluti-a-Phofung is one of the most severe cases of cumulative municipal failure, given its missing audited accounts, chronic bulk-service debt, and critical wastewater systems.

“The F grade is not a finding that recovery is impossible or that the current mayor caused the accumulated crisis. It is the direct result of 60 failed tests and only eight fully met standards,” said the foundation.

The municipality has already faced repeated criticisms from the Auditor General of South Africa for failing to submit its consolidated annual financial statements since 2016/17.

There are also serious backlogs and ongoing dysfunction of both the municipality and its entity, Maluti-A-Phofung Water SOC Ltd.

A municipality in distress

The municipality is centred on Phuthaditjhaba and includes the settlements of Harrismith, Kestell, and QwaQwa, as well as large traditional authority areas.

The wider population is large, and the area’s settlements are dispersed. It is severely constrained by poverty and unemployment, making municipal governance incredibly hard.

The foundation noted that the municipality received limited credit, as some water, electricity, road, facility, and capital activities continue.

While the municipality reported capital execution of around 82% and cleared the foundation’s 75% threshold for grading, the wider service record is one of acute distress.

“Wastewater is the clearest objective failure. That result follows directly from the regulatory evidence rather than from editorial description,” it said.

Overall, the municipality’s services category scored a 5.5 out of 30. The financial management section scored a mere 0.5 out of 25, as positive standards could not be established.

The municipality’s records show an unfunded budget, severely strained liquidity, collections well below 80%, chronic arrears with Eskom and the water board, and breached payment arrangements.

It also scored 5.5 out of 15 for governance, with the municipal manager and chief financial officer posts reported as filled, and formal planning and consultation continued.

However, political turnover and the broken reporting cycle prevented coherent administration.

While formal systems exist, the lack of audited reporting and clear consequences prevents stronger awards; hence, the 4.5 out of 15 score for integrity.

On a relatively positive note, inclusion scored 8 out of 15, with a social-support framework and participation evident in the municipality, although their reach could not be fully verified.

The foundation said that a credible route upward would start with submitted audited statements on time, a funded and budgeted collection improvement plan, and honoured bulk-payment arrangements.

The municipality also needs stable leadership and independently verified wastewater recovery to achieve a higher ranking.

“The trajectory is deteriorating because of the reporting failure, political turnover and critical service conditions,” said the foundation.

Photos of Maluti-a-Phofung