Five things you need to know about SA’s worsening municipal crisis

South Africa’s biggest cities are failing to get their financial houses in order, with auditor-general Tsakani Maluleke warning that worsening governance, collapsing service delivery and billions lost to irregular expenditure are threatening the country’s economic future.

Presenting the 2024/25 local government audit outcomes in parliament on Wednesday, Maluleke painted a grim picture, saying none of the country’s eight metros had achieved a clean audit.

Here are five things to know about the country’s worsening municipalities crisis:

• For the first time, none of the metros achieved a clean audit in the 2024/25 financial year. Maluleke warned of “concerning regressions” in all eight metros, citing weak financial discipline, worsening service delivery and declining investor confidence.
• The number of municipalities with clean audits dropped from 41 to 39. Those municipalities manage just R52.6bn, or 8%, of the local government’s R622.5bn expenditure budget.
• Metros and their entities accounted for 58% of total irregular expenditure in 2024/25. Since 2021/22, major contributors include Tshwane (R12.1bn), Joburg’s City Power (R11.8bn), Buffalo City (R10.6bn) and eThekwini (R10bn).
• The AG said Johannesburg needs urgent intervention as its finances, service delivery and infrastructure continue to deteriorate. The city is technically insolvent, owes Eskom R5.3bn, has an infrastructure backlog exceeding R200bn and is losing investor confidence.
• Maluleke said municipalities need capable, ethical leadership and stronger accountability. She urged national, provincial and local governments to work together to implement long-term structural reforms and prevent further decline in metros.

Sowetan