With local government elections set for 2026, addressing the challenges faced by municipalities has become an urgent priority. However, experts argue that the real issue lies not only in corruption, but in the flawed funding methodology employed by the National Treasury.

According to Gundo Maswime, a lecturer and municipal infrastructure expert at the University of Cape Town in SA, the current formula used to determine local transfers has deep-rooted flaws. Originally designed in the 1990s, it assumes municipalities would be able to collect revenue through local taxes, but many are failing in this regard. Larger cities like Cape Town and Johannesburg manage to collect taxes, but smaller municipalities, particularly in rural areas, are severely underfunded.

Maswime explains that the formula allocates a mere 9% of national revenue to local governments, with a further disparity in the distribution of funds based on factors like infrastructure backlogs. As a result, wealthier municipalities benefit disproportionately, while others struggle to provide basic services.

Although there have been several attempts to reform this funding structure, political resistance has delayed progress. The Democratic Alliance, which governs municipalities like Cape Town, is reluctant to accept any changes that could negatively impact their finances.

With the 2026 elections approaching, it is unlikely that these reforms will be in place in time. The lack of skilled professionals in municipalities, exacerbated by years of underfunding, further complicates the situation.  

--ChannelAfrica--