SALGA pushing for complere review of local government funding
The South African Local Government Association (SALGA) wants a comprehensive review of the system governing local government funding.
It has reiterated the warning that many local councils no longer have enough money to function effectively.
This follows the tabling of the Medium Term Revenue and Expenditure Framework by Finance Minister Enoch Godongwana last month.
Also referred to as the mini budget, it showed that municipalities are expected to raise R675.8-billion in revenue next year, increasing to R712.6-billion in 2026/27 and R753.5-billion in 2027/28.
SALGA’s Lerato Phasha says municipalities are facing deepening operating deficits, with spending outpacing revenue.
She also notes that many municipalities are battling to raise debt in the market and are unable to build adequate reserves for infrastructure and capital projects.
As of March, municipalities were owed R416-billion by households, businesses, and government departments, a debt burden Phasha says is crippling their ability to maintain essential infrastructure.
To ease the pressure, SALGA has introduced a revised exemption process to support struggling municipalities during wage negotiations as part of the review of the 1998 White Paper.
Phasha says long-term, sustainable funding solutions will require partnership and participation from all stakeholders, including residents.
“We need to work together to develop sustainable ways of funding and financing municipalities,” she says.
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