Independent governance ratings agency Ratings Afrika’s newest yearly Municipal Financial Sustainability Index (MFSI) confirms the severe financial distress facing the majority of South Africa’s municipalities, with the notable exception being most of the Western Cape’s municipalities, as well as Midvaal, in Gauteng.
“The experience of Western Cape municipalities shows that South Africa’s current municipal funding model is not fundamentally flawed or broken,” states the report.
“Rather, what is needed is greater accountability from elected councillors and municipal executive management to ensure effective financial governance and responsible stewardship of public resources.
“If left unchecked, South Africa faces a growing risk of systemic municipal failure with profound social and economic consequences.”
The MFSI assesses the financial performance of South Africa’s 120 largest local municipalities and eight metropolitan municipalities, based on the results for the financial year ended June 2025.
