The tiny municipality in South Africa that spends R23,000 on each resident

Gamagara in the Northern Cape spends the most money on its residents out of all the municipalities in South Africa.

According to Stats SA’s latest data, South Africa’s 257 municipalities spent R532 billion in 2022, including operational and capital expenditures.

If considering the census 2022 national population figure of 62 million, municipalities spent, on average, R8,572 per resident.

On a provincial level, municipalities in Gauteng spent the highest per resident, at R12,060, followed by the Western Cape’s R10,411 per resident.

Limpopo registered the lowest value at R4,429 spent per resident.

Zooming in to individual municipalities, however, the analysis shows that spending per resident is highest in the Gamagara municipality in the Northern Cape at R23,201 spent per resident.

Tokologo in the Free State comes in second at R14,749 per resident, close to R9,000 less than Gamagara.

On the other end of the scale, the Nongoma municipality in KwaZulu-Natal only spends R1,389 per resident.

Gamagara’s outlier status isn’t a once-off occurrence. In a similar study using 2016 data, the municipality also recorded the highest per capita spending.

Stats SA said that Gamagara recorded a high value for the line item of ‘inventories losses/write-downs’ in 2022, which made a huge contribution to its total expenditure.

Another reason for the expenditure could be the town of Kathu, whose economy is mainly driven by Sishen, Kumba Iron Ore’s flagship mine.

The town thus attracts skilled workers and high-income earners.

According to the National Treasury’s Spacial Economic Activity Data dashboard, Gamagara is the sixth richest municipality in South Africa, based on the most recent data, which shows an average taxable income per resident of R27,929.

Stats SA also said that the municipality is relatively self-sufficient in terms of revenue.

“For every R100 of revenue in 2022, R90 was self-generated—i.e. sourced from property taxes, service charges, fines, etc.—while R10 was sourced from the national and provincial governments,” said the statistics agency.

“This is notable, as the R90 figure is above the B3 municipality (small town) average of R62 and the national average of R73. If this metric is used to measure self-reliance, Gamagara was the most financially independent municipality in 2022.”

Although Gamagara’s population of 29,580 makes it only the 12th most populous municipality in the Northern Cape, it was still the fourth-largest generator of revenue and spender in the province.

Slight problem

However, Stats SA admitted that the analysis does have faults, as district municipalities are excluded.

“This is because each district oversees several local municipalities. If there is district expenditure that targets residents on the ground, it is not clear from the data how this spending is allocated across local areas,” said Stats SA.

“Districts mainly fill an administrative function. However, there are several districts—mainly in rural provinces—that help with the provision of services, which is reflected in their financial reports.”

“In other words, the analysis above excludes the benefits that may arise from district municipal spending, especially in provinces where districts play a more active role.”

The data showed that significant metros are more likely to spend on residents than local municipalities, especially those in rural areas.

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