Gauteng finance and economic development MEC Lebogang Maile says municipalities in the province have shown encouraging revenue performance in the first half of the 2025/26 financial year but warned that slow capital spending and rising debt could undermine service delivery if not urgently addressed.
Speaking on Sunday while releasing the consolidated quarterly state of municipal finances report for the period ending December 31 2025, Maile said the update was part of a broader effort to promote transparency and accountability in local government.
“We are publishing this report in the interest of openness. Communities have a right to know how their municipalities are managing public funds and how that management impacts the quality of services they receive,” Maile said.
He said at the start of the financial year on July 1 2025, Gauteng municipalities adopted a combined operating budget of R229.1bn in revenue and R222.2bn in expenditure, projecting a surplus of R6.9bn.
By the end of December, operating revenue had reached R123.3bn, or 53.9% of the annual target, exceeding the straight-line benchmark of 50%.
Gauteng’s three metros — Johannesburg, Ekurhuleni and Tshwane — were the main contributors to revenue, while operating expenditure stood at R109.2bn , or 49.2% of the annual budget.
This level of underperformance on infrastructure projects is worrying. If we fail to accelerate delivery, it is our communities who ultimately pay the price through delayed or inadequate services.
— Lebogang Maile, Gauteng finance and economic development MEC
However, Johannesburg, Lesedi, Merafong City and Rand West City reported accumulated operating deficits during the period. An operating deficit occurs when a municipality’s day-to-day expenses exceed its day-to-day income over a financial period. This means that the four municipalities spent more to keep services running than it is collecting from rates, service charges and other operating revenue.
Maile also expressed concern over capital spending, with only R5.4bn, or 34%, of the R16.2bn capital budget spent by mid-year.
“This level of underperformance on infrastructure projects is worrying. If we fail to accelerate delivery, it is our communities who ultimately pay the price through delayed or inadequate services,” he said.
In the report Maile revealed that the total municipal debtors’ balance stood at R165.7bn, largely driven by household debt. The Gauteng provincial government’s outstanding balance to municipalities amounted to R2bn, while municipalities owed the province R2.03bn in uncollected motor vehicle licence fees.
Maile said the provincial Treasury would continue to strengthen oversight through targeted financial support programmes and the intergovernmental debt management committee.
“Our focus is on building financially stable municipalities that can deliver quality services and restore public confidence in local government,” he said.
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