Newcastle Local Municipality Profile

In 2022 The AG reported that local government finances remain under severe pressure due to non-payment by municipal debtors, poor budgeting practices and ineffective financial
management.

She said the financial position of 28% of South Africa’s municipalities is so dire that there is
significant doubt about whether they will be able to continue operating in the near future. This effectively means that such municipalities do not have enough revenue to cover their
expenditure; they owe more money than they have; and they can no longer pay salaries and
other obligations as they fall due, or maintain infrastructure assets such as roads and provide water and other basic services. Many of these municipalities have been in this dire financial position multiple times over the course of the administration.

The AGSA’s assessment of the financial health of 230 municipalities and 18 municipal entities based on their financial statements revealed increasing indicators of a collapse in local government finances and continued deterioration over the term of the administration.

Maluleke paints a picture of municipalities often depending on the money they receive from the national government (in the form of an equitable share) to stay afloat. In 2020-21, this amounted to R80,26 billion, up from R67,83 billion in the previous year.