<\/p>\n
South Africa\u2019s metropolitan municipalities are sinking deeper into financial trouble, with the lone exception of Cape Town, according to an analysis by Ratings Afrika.<\/p>\n
All but Cape Town spent more than they earned in 2025, with the remaining seven racking up combined liquidity shortfalls of nearly R12.6 billion.<\/p>\n
Read: Local government elections and the state of our municipalities<\/p>\n
Cape Town scored 71 out of 100 on the Ratings Afrika Municipal Financial Sustainability Index (MFSI), well ahead of second-placed Nelson Mandela Bay on 48 and Buffalo City on 43.<\/p>\n
The average score across the eight metros was just under 40.<\/p>\n
Joburg\u2019s finances worsen<\/p>\n
The picture for Johannesburg is bleak and getting worse, with four consecutive years of operating losses boring a jumbo-sized hole into the city\u2019s finances.<\/p>\n
A liquidity surplus of R2.6 billion in 2021 had deteriorated into a liquidity shortfall of R10.1 billion by 2025.<\/p>\n
Another contributor to Johannesburg\u2019s financial difficulties is its poor revenue collection rate of only 84.4%, which is more than 10 percentage points below the generally accepted benchmark of 95%.<\/p>\n
\u201cUnless revenue collection improves substantially, Johannesburg is likely to remain on a downward financial trajectory, with the risk of a serious financial crisis becoming increasingly pronounced,\u201d says Ratings Afrika.<\/p>\n
Read:<\/p>\n
National Treasury has a three-year plan to fix Joburg
\nIf we don\u2019t fix Joburg, there\u2019s little hope for the country
\nIt\u2019s time to get the political hacks out of Joburg city management<\/p>\n
Johannesburg will continue to rely on borrowing to finance infrastructure development. Its borrowings increased to R22.9 billion in 2025, the highest level among all metros and equivalent to more than 34% of operating revenue.<\/p>\n
The MFSI scores each municipality out of 100 using information from its audited financial statements. It evaluates six areas: operating performance, liquidity management, debt governance, budget practices, affordability and infrastructure development.<\/p>\n
\u201cThe City of Gold has unfortunately lost much of its shine,\u201d says Leon Claassen, managing executive at Ratings Afrika.<\/p>\n
\u201cRestoring Johannesburg to its former economic and urban stature will require an extraordinary and sustained effort. Above all, this will depend on rebuilding the City\u2019s financial sustainability, strengthening governance and ensuring that available resources are used efficiently to restore service delivery and support long-term infrastructure investment.\u201d<\/p>\n
The Ratings Afrika assessment of Joburg mirrors recent reports from the Centre for Development and Enterprise (CDE), depicting a city peering into the abyss.<\/p>\n
ADVERTISEMENT<\/p>\n
CONTINUE READING BELOW<\/p>\n
It has had nine mayors and eight coalition administrations since 2016, while political allegiance has taken precedence over competence in key appointments.<\/p>\n
Tshwane\u2019s race to the bottom<\/p>\n
Tshwane is in the weakest financial position of any metro, with a financial sustainability score of just 25.<\/p>\n
Read:<\/p>\n
France and Germany commit R5.6bn to SA metro reforms
\nTshwane budget \u2018funded\u2019 despite R2bn gap in staff cost requirement<\/p>\n
Its financial problems stem from weak operating performance, with the metro spending well beyond its means. Its liquidity shortfall spiked to R8.4 billion in 2025, while revenue collection (the percentage of invoices actually collected) was 88%.<\/p>\n
This puts Tshwane under pressure to increase rates and tariffs, but doing so could make these services unaffordable for many residents.<\/p>\n
Tshwane\u2019s capital expenditure of just R1.5 billion in 2025 is far too low for a city of its size, giving it an infrastructure development score of just 16.<\/p>\n
Its debt burden, at 31.8% of operating revenue, is considered moderate, but as debt increases so does its risk profile. This means it has limited capacity to take on additional borrowing should this become necessary.<\/p>\n
Cape Town bucks the trend<\/p>\n
Cape Town is no stranger to the gold medal podium.<\/p>\n
An operating surplus of R2.9 billion, together with government grants of R2.3 billion, enabled the city to invest R9.6 billion in infrastructure in 2025.<\/p>\n
It has consistently maintained a high level of infrastructure investment over the past three years, with cumulative expenditure of R25.2 billion. Ratings Afrika says this is well above average and is reflected in Cape Town\u2019s very high infrastructure development score of 79.<\/p>\n
The operating surpluses generated by Cape Town over the past three years have been sufficient to limit the city\u2019s borrowing requirements to about R1 billion in 2025.<\/p>\n
The city\u2019s long-term borrowings increased modestly, from R5.6 billion in 2024 to R6.5 billion in 2025.<\/p>\n
\u201cWith borrowings equivalent to only 11.8% of operating revenue, Cape Town\u2019s debt burden remains low, reflecting a low level of financial risk,\u201d says the report.<\/p>\n
The sustainability of SA\u2019s metros<\/p>\n
ADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n
Metro
\nSustainability score
\nOperating surplus\/(loss)
\nLiquidity surplus\/(shortfall)<\/p>\n
Cape Town
\n71
\nR3.0bn
\nR12.3bn<\/p>\n
Nelson Mandela Bay
\n48
\n(R1.2bn)
\nR4.2bn<\/p>\n
Buffalo City
\n43
\n(R1.0bn)
\nR608m<\/p>\n
eThekwini
\n36
\n(R3.3bn)
\n(R5.0bn)<\/p>\n
Johannesburg
\n35
\n(R2.8bn)
\n(R10.2bn)<\/p>\n
Ekurhuleni
\n31
\n(R2.5bn)
\n(R4.6bn)<\/p>\n
Mangaung
\n30
\n(R510m)
\n(R1.3bn)<\/p>\n
Tshwane
\n25
\n(R1.3bn)
\n(R8.4bn)<\/p>\n
Source: Ratings Afrika<\/p>\n
Nelson Mandela Bay<\/p>\n
Nelson Mandela Bay enjoys a \u201cfair\u201d level of financial sustainability, reporting an operating loss of R1 billion in 2025, an improvement on the R1.3 billion loss recorded the previous year.<\/p>\n
Five years of operating losses have weakened its liquidity position.<\/p>\n
But perhaps most alarming is the revenue collection rate of just 71%.<\/p>\n
If this does not improve, the metro\u2019s ability to maintain effective service delivery will be constrained.<\/p>\n
Read:\u00a0NMB sitting on land that could drive tourism and economic growth<\/p>\n
The city will need to address losses arising from service delivery, particularly electricity. Its long-term borrowings remained low at R800 million, equivalent to 5.3% of operating revenue.<\/p>\n
Ekurhuleni<\/p>\n
Ekurhuleni is another metro in trouble, scoring just 31 on the MFSI.<\/p>\n
This is due largely to five consecutive years of operating deficits, which have weakened its capacity to invest in the infrastructure required to support a rapidly growing metro.<\/p>\n
Read: Business confidence hinges on fixing municipal failures<\/p>\n
This is reflected in the declining score for the infrastructure development component, which fell from 62 in 2021 to just 40 in 2025.<\/p>\n
If this trend continues, it could, over time, adversely affect the functionality and sustainability of the metro, says the report.<\/p>\n
Mangaung<\/p>\n
ADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n
Mangaung, long regarded as one of the worst-run metros in SA, continues to struggle with persistent operating losses, the result of weak budgetary practices and poor financial discipline.<\/p>\n
Maintenance has been deferred due to a lack of funds, as has investment in infrastructure.<\/p>\n
Capital expenditure has been financed largely from the municipality\u2019s own resources and capital grants received. Over the past two years, Mangaung has not raised any new loans.<\/p>\n
Consequently, its outstanding borrowings have declined to R384 million, equivalent to only 4.5% of operating revenue.<\/p>\n
While the low level of borrowing limits debt-related financial pressures, it also highlights the municipality\u2019s constrained capacity to finance infrastructure investment through debt.<\/p>\n
Buffalo City<\/p>\n
Buffalo City\u2019s financial sustainability is considered fair but has been on the decline since 2021. The city\u2019s operating expenditure is running well ahead of revenue, while revenue collection of 85% over the past two years is placing it under severe liquidity pressure.<\/p>\n
The city spent R3.7 billion on infrastructure over the previous three years, which is considered adequate given its size and revenue base.<\/p>\n
Buffalo City\u2019s borrowings as a percentage of revenue are extremely low at 1%, giving it capacity to increase debt should it want to accelerate infrastructure expansion.<\/p>\n
eThekwini<\/p>\n
eThekwini is likewise considered to have a \u201cfair\u201d MFSI score of 36, but its position has deteriorated over the last decade.<\/p>\n
Read:<\/p>\n
Only 39 municipalities receive clean audits \u2013\u00a0AG report
\neThekwini wants biggest jump in tariffs, with Joburg not far behind<\/p>\n
Investment in infrastructure over the last three years amounted to R18.7 billion, giving it an infrastructure development score of 75.<\/p>\n
The metro raised R4 billion in new loans over the last three years, bringing total debt to R8.9 billion.<\/p>\n
Its debt burden relative to operating income, at 18%, is moderate, but unless it gets a tighter grip on operating expenditure and liquidity, services are likely to suffer.<\/p>\n
#Financial #alarm #bells #ring #SAs #metros<\/p>\n","protected":false},"excerpt":{"rendered":"
South Africa\u2019s metropolitan municipalities are sinking deeper into financial trouble, with the lone exception of…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[1569,10973,121,8878,581,415],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/16634"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16634"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/16634\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16634"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16634"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}