SA’s Municipal Finances: Big Budgets, Bigger Debt, and Red Flags

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South Africa’s municipalities spent nearly R600 billion last year, but they also missed key revenue targets, racked up R427 billion in unpaid consumer debt, and many are running on empty bank accounts.

National Treasury’s latest report (covering 1 July 2024 to 30 June 2025) shows that while 90% of budgets were spent, actual revenue collection lagged behind. The scary part? 49 municipalities ended the year with negative cash balances, and households owe over R300 billion in unpaid bills.

Key Takeaways

• Debt is ballooning at R376.1 billion with over 87% of outstanding consumer debt is older than 90 days, meaning it’s unlikely to be recovered.

• Creditors aren’t getting paid. Municipalities owe suppliers R156 billion, much of it overdue.

• Only 72.9% of billed revenue was actually collected, way below the planned 94.8%.

• Capital budgets underdelivered with only 65% of planned infrastructure spending completed.

• Conditional grants, those that are meant for things like water, sanitation and disaster relief also saw major underspending, with many municipalities blaming late planning and procurement issues.

In summary

Municipalities are budgeting more than they can collect, falling short on service delivery, and showing signs of cash flow distress.

📢 Take note: Whether you’re advising clients or managing municipal finances, these numbers are your red flags. If you're not helping clients navigate this space, you're missing a huge advisory opportunity.

➡️ See the full Media Statement on the National Treasury website.