National government poured more money into local government even as evidence mounts that many municipalities cannot manage what they already receive.
Recent Statistics South Africa figures show that intergovernmental and institutional grants rose by R42 billion in 2024/25 to R1.144 trillion, up from R1.102 trillion the year before. Transfers to local government alone increased by R10 billion, from R157.7 billion to R167.7 billion.
Yet the Auditor-General’s latest report found that only 35% of municipalities were in good financial health, 58 were in such poor condition that there was significant doubt about their ability to continue operating as going concerns.
In addition, 116 had adopted unfunded budgets – committing to R288.17 billion in expenditure without identifying where the money would come from.
Statistics South Africa, looking back 20 years, said government grants to municipalities accounted for 54% of national government’s total operating cash expenditure, making them by far the state’s largest area of spending.
