An operating deficit means a municipality spent more on day-to-day running costs than it collected in revenue. Salaries, bulk electricity and water purchases, repairs and interest all count. Capital projects do not. A municipality that runs a deficit year after year is consuming reserves or falling behind on what it owes.
That is 80.2% of all municipalities, and it includes metros as well as small rural councils. A deficit is not automatically a crisis: a single bad year can reflect a one-off write-down. Sustained deficits are the problem, and the scale of some here is substantial.
The largest deficits relative to revenue
Ranking by rand value would simply list the biggest municipalities. Measuring the deficit as a share of operating revenue shows which are furthest beyond their means.
| Municipality | Province | Margin | Deficit | Grade |
|---|---|---|---|---|
| Ratlou | North West | -2 351.4% | -R18.7 million | F |
| Mafube | Free State | -148.7% | -R306.3 million | F |
| !Kheis | Northern Cape | -109.0% | -R77.7 million | E |
| Maluti-a-Phofung | Free State | -94.7% | -R1.5 billion | F |
| Dipaleseng | Mpumalanga | -90.8% | -R332.1 million | E |
| Modimolle-Mookgopong | Limpopo | -88.0% | -R742.1 million | E |
| Impendle | KwaZulu-Natal | -81.8% | -R41.8 million | F |
| Mpofana | KwaZulu-Natal | -80.2% | -R120.4 million | E |
| Kgetlengrivier | North West | -72.3% | -R161.1 million | E |
| Phokwane | Northern Cape | -70.2% | -R333.5 million | D |
| !Kai! Garib | Northern Cape | -68.1% | -R233.6 million | F |
| Hantam | Northern Cape | -66.5% | -R75.8 million | F |
| Emthanjeni | Northern Cape | -66.3% | -R196.2 million | E |
| Tsantsabane | Northern Cape | -66.3% | -R162.3 million | F |
| Merafong City | Gauteng | -63.7% | -R1.4 billion | F |
Who is in surplus
Not every municipality is under strain. These reported the healthiest operating margins.
| Municipality | Province | Margin | Surplus | Grade |
|---|---|---|---|---|
| Nama Khoi | Northern Cape | 49.5% | R522.1 million | B |
| Kopanong | Free State | 47.3% | R562.0 million | D |
| Sundays River Valley | Eastern Cape | 42.9% | R120.7 million | E |
| Nyandeni | Eastern Cape | 41.6% | R239.1 million | C |
| Ngaka Modiri Molema | North West | 38.4% | R508.7 million | D |
| Kagisano-Molopo | North West | 36.2% | R45.5 million | D |
| Dr J.S. Moroka | Mpumalanga | 31.8% | R302.3 million | C |
| Thabo Mofutsanyana | Free State | 26.9% | R31.4 million | C |
| Nala | Free State | 26.6% | R210.5 million | B |
| Lepelle-Nkumpi | Limpopo | 26.4% | R141.8 million | B |
Why it matters
A deficit has to be funded from somewhere. In practice that usually means delaying payments to creditors, including Eskom and the water boards, or drawing down cash reserves that were meant for infrastructure. Both show up later as service failures.
You can see the operating margin, alongside four other measures, on the financial health scorecard on every municipality profile.
Figures on this page come from National Treasury, Statistics South Africa and the Auditor-General, as set out in the sources and methodology. Read the methodology