Africa-Press – South-Africa. Amid significant turmoil and financial struggles at many of South Africa’s municipalities, Mogale City in Gauteng was able to make an impressive turnaround.
From reducing its debt to Eskom, mainintaing up to date accounts with bulk suppliers, and improving service delivery through targeted investments, this municipality “rose from the ash”.
This is according to the Gauteng Provincial Legislature’s Portfolio Committee on Cooperative Governance and Traditional Affairs (CoGTA), which recently conducted an oversight meeting with Mogale City.
The committee found that Mogale City has made steady progress in stabilising its finances and strengthening governance.
According to the municipality’s report, Mogale achieved a R355.5 million surplus in 2025, supported by revenue growth to R4.57 billion.
The city also boasted improved liquidity, with cash reserves rising to R299.9 million from R149.7 million the previous year.
The municipality has also reduced borrowings from R156.3 million to R122.7 million, secured Eskom debt relief of R216 million, and now maintains up-to-date accounts with Eskom and Rand Water.
“These developments, combined with a 90% revenue collection rate and improved compliance with conditional grants, reflect a municipality that is financially viable and on a sustainable path,” the committee said.
The city has also made significant inroads in improving service delivery through targeted investments, including R8.8 million for pothole repairs, R12 million for refuse removal, R12 million for electrical network maintenance and R33 million for chemical toilets.
“The municipality has also maintained a high utilisation of its capital budget, directing funds towards infrastructure renewal,” the committee said.
Despite this impressive progress, Mogale still has some ways to go, with several challenges remaining.
This includes delays in sewage projects such as the Flip Human Waste Water Treatment Works, losses in water and electricity supply estimated at 26% and 12%, respectively, and the urgent need for renewing ageing infrastructure across the municipality.
However, the committee reaffirmed Mogale City as a “best-practice example” of municipal financial recovery, noting its credible, funded budget and sound cash flow management.
Committee Chairperson Mzi Khumalo commended Mogale City’s leadership for steering the municipality towards recovery. The city’s Executive Mayor, Lucky Sele, said, “We rose from the ash”.
South Africa’s municipalities in trouble
Auditor-General Tsakani Maluleke
Mogale’s successes come as many other municipalities in South Africa are facing immense difficulties both financially and in terms of service delivery.
South Africa’s Auditor-General (AG), Tsakani Maluleke, sounded the alarm about mismanagement at South Africa’s municipalities in her latest Integrated Annual Report for the 2023/24 fiscal year.
Specifically, she said many of the country’s municipalities and metros are plagued by poor revenue management, debt collection and budgeting practices, and financial losses due to poor-quality spending.
She said a lack of institutional capability directly leads to poor financial management practices, a problem seen in many of South Africa’s municipalities.
In the 2022/23 AG report, only 34 South African municipalities received clean audits compared to 163 a decade ago.
“And that’s why, not only do you get your debits and credits wrong, but also you end up with huge financial viability problems,” Maluleke explained.
“You don’t pay your creditors on time because you’re running out of cash. You approve unfunded budgets. You end up with unauthorised expenditure or spending money on things you shouldn’t be spending on.”
This lack of financial viability impacts a municipality’s ability to deliver services efficiently and consistently.
“Performance becomes a problem because you’re not even planning to do the very basics, like maintain your infrastructure. So then service delivery suffers,” Maluleke said.
This not only negatively impacts the municipalities’ residents but also places an immense burden on all taxpayers, as struggling cities increasingly turn to the National Treasury for support.
Despite the implementation of the Treasury’s municipal debt relief programme, which aims to assist municipalities in reducing their debts to Eskom, several local governments continue to struggle.
In March 2025, Finance Minister Enoch Godongwana warned that as many as 47 municipalities could be terminated from the debt relief programme.
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