Godongwana: 63% of SA municipalities in financial distress

Finance Minister Enoch Godongwana said that many municipalities still found themselves in financial distress and were failing to deliver the most basic services.

Godongwana said government will be incentivising municipalities to treat the provision of services, such as water, like a business that must be run professionally.

Tabling his 2026 Budget speech on Wednesday, he noted that National Treasury was revitalising its support as it developed long-term financial plans for local government.

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Godongwana said local government was the sphere where communities experienced the state most directly.

This sphere will also be a major focus when the country heads to the local government elections later this year.

The minister said many municipalities were in "financial and operational distress" and were unable to deliver services like water, even in big metros such as Johannesburg.

“Audit outcomes highlight this unacceptable reality: 63 per cent of municipalities are in financial distress, and the proportion of clean audits remains unacceptably low. A central challenge with municipalities is that they not only differ in capacity, but also in their revenue-raising potential.”

Godongwana said further structural reforms were underway in municipalities, including a comprehensive review of the local government fiscal framework.