CAPE TOWN, South Africa, March 12, 2024/ — The South African Local Government Association (SALGA) has called for more funding to improve the financial sustainability of municipalities. SALGA briefed the Standing Committee on Appropriations on the 2024 Budget and the Division of Revenue as part of the Money Bills and Related Matters Act on Tuesday, 12 March.
SALGA welcomed the increased allocation of R177 billion to local government. However, they argued that this still did not address the broader issue of inadequate funding at the local level. Ms Lerato Phasha, the representative from SALGA, highlighted the struggles many local municipalities face in covering their expenditures due to high levels of unemployment, poverty, and reluctance to pay for services by communities.
According to SALGA, the R484 million in conditional grants allocated for the financial year 2024/25 was inadequate considering the substantial infrastructure backlogs in municipalities. The organisation called for more funding for local government to address the infrastructure backlogs and cover expenditures in the face of high unemployment rates and poverty levels.
The committee, in response, recommended public-private partnerships with local spheres of government. This approach would involve redirecting revenue from companies operating in provinces toward the areas they operate in and in so doing, they contribute to local investment and development.
The committee also suggested that the local government sphere should not solely rely on the national government but should work towards revitalising and mobilising local businesses to attract local investment. By doing this, municipalities can strengthen their revenue streams and ultimately improve the quality of services they provide to communities. The committee told SALGA that a comprehensive strategy would help alleviate the financial burdens of municipalities and enable them to address their infrastructure backlogs more effectively.
Meanwhile, SALGA also welcomed the rollout of smart meters to the tune of R2 billion for its members in the local government sphere. However, SALGA wants all member municipalities to benefit from this rollout without restricting it to defaulting municipalities that fall under the Eskom debt relief package.
According to SALGA, the rollout should not be left to municipalities alone, but there should be end-to-end support until municipalities can run the installation themselves.
