Municipal revenue comes from property rates, service charges, transfers from national government, and other own income. The balance between them determines how much control a municipality has over its own finances.
Why dependency matters
A municipality that raises most of its revenue locally can plan several years ahead and respond to changing costs. One funded largely by transfers is administering an allocation set elsewhere, on a formula it cannot influence, with limited capacity to absorb a shock.
Grant dependency is not a failing on the part of the municipality. It follows almost entirely from the property base. Where land is held communally and property values are low, rates income is minimal no matter how well the municipality is run.
The pattern by province
| Province | Municipalities | Combined spending | Average financial health score |
|---|---|---|---|
| Eastern Cape | 39 | R55.7 billion | 49.7 |
| Free State | 23 | R32.7 billion | 33.9 |
| Gauteng | 11 | R210.6 billion | 44.0 |
| KwaZulu-Natal | 54 | R109.8 billion | 49.8 |
| Limpopo | 27 | R31.7 billion | 52.4 |
| Mpumalanga | 20 | R35.8 billion | 41.0 |
| North West | 22 | R29.3 billion | 36.7 |
| Northern Cape | 31 | R12.4 billion | 39.1 |
| Western Cape | 30 | R93.5 billion | 71.6 |
The provinces with the lowest average financial health scores are broadly those with the weakest local revenue bases, which is the clearest evidence that this is structural rather than simply a matter of administration.
See it for yourself
Every municipality profile breaks revenue down into property rates, service charges, investment revenue, operational transfers and other own revenue, across five years. The ratio between transfers and own revenue is visible directly in that table.
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