Collapsing municipalities can have a negative impact on South Africa’s economy according to a new Bureau for Economic Research report.
Collapsing municipalities can have a profoundly negative impact on South Africa’s economy, and the situation is declining at an alarming rate, according to a Bureau for Economic Research.(BER) report.
The report follows Finance Minister Enoch Godongwana announcing earlier this week that he is withholding the July 2026 equitable share transfers to 69 municipalities due to non-compliance with the Municipal Finance Management Act (MFMA), and mismanagement of municipal funding.
The report by BER’s economics writer and researcher Claire Bisseker said that cities and towns across South Africa are failing after years of underspending on infrastructure and maintenance. “If left unchecked, the country faces a growing risk of systemic municipal failure with profound social and economic consequences.”
The report said Joburg’s foundations are cracking after a decade of protracted financial stress and underinvestment in critical infrastructure. “It’s a story that is being repeated endlessly in nearly every town across South Africa — and the situation appears to be getting worse.”
