Municipalities in South Africa–like those around the world–have faced challenges and opportunities in achieving financial sustainability, efficient service delivery, and responsive governance in recent years.
As part of its efforts to ensure an efficient and responsive local governance system in the province, the Western Cape Provincial Treasury recently released the 2023/24 Municipal Budget Performance Review. This first-of-its-kind publication offers a transparent and data-driven snapshot of the financial health of all 30 municipalities in the province for the 2023/24 financial year.
The report analyses trends over the past three financial years, providing insights into the current performance landscape and its underlying drivers. By highlighting key revenue and expenditure patterns, alongside an evaluation of financial health indicators, the provincial treasury aims to shed light on areas of progress as well as issues needing focused intervention.
Through accessible financial insights, this report aims to deepen public understanding of how municipal financial performance impacts communities, building trust and encouraging participation. It also serves as a basis for Provincial Treasury’s recommendations for the upcoming 2025/26 municipal planning and budgeting cycle, supporting strategic adjustments and fostering resilience across all municipalities.
Western Cape Minister of Finance, Deidré Baartman, said, “We are very proud to publish this report. It is another crucial step to highlighting transparency and accountability on how our resident’s money is being spent at a municipal level.” Despite fiscal pressures compounded by growing socio-economic and political challenges, the municipalities of the Western Cape have demonstrated resilience and a strong commitment to sound financial management.
“The financial wellbeing of the Western Cape’s municipalities is not something we take for granted. It is a continuous effort. Municipalities, with the support of the Western Cape Provincial Treasury, the Department of Local Government, South African Local Government Association (SALGA) and National Treasury, have worked consistently to maintain their financial health,” Minister Baartman emphasized.
Some of the highlights from the 2023/24 Municipal Budget Performance Review include:
- Strong Revenue Collection: 25 municipalities achieved 95% or above of their revenue targets, resulting in a 7.5% year-on-year real revenue growth. This is an improvement from the negative growth recorded in the previous year.
- Capital Investment: In the 2023/24 financial year, municipalities collectively spent R13.94 billion of which R9.74 billion was spent on infrastructure. New infrastructure spend focused on projects such as the expansion of road networks and upgrading sanitation services.
- Electricity Revenue Recovery: Following a protracted period without load shedding in 2024, municipal electricity revenues rebounded and generated R29.02 billion.
- Efficient Use of Grants and Subsidies: Municipalities successfully utilized 97.5% of operating transfers and subsidies, reflecting improved grant management and enhanced service delivery efficiency.
While this report highlights successes in municipal financial management, it also acknowledges ongoing challenges, including rising municipal debt and underperforming collection rates that need urgent attention. The report also stresses the need for sustainable infrastructure investment and stronger asset management to ensure long-term service delivery. As such, the 2023/24 Municipal Budget Performance Review will be an important guide for municipalities’ strategic planning to strengthen their financial sustainability.
The full 2023/24 Municipal Budget Performance Review document can be accessed from the Western Cape Province website.
