Pretoria: National Treasury has released the operating and capital budgets for municipalities, as approved by their respective councils, on its website. These budgets provide an overview of anticipated revenue and expenditure trends in local government over the next three years, referred to as the 2024/25 Medium Term Revenue and Expenditure Framework (MTREF).

According to South African Government News Agency, the revenue and expenditure figures are compiled from the annual budgets that municipal managers are legally obligated to submit to National Treasury and the relevant Provincial Treasury. The published information is available in various formats, including aggregated municipal budget totals for the 2024/25 financial year and over the medium-term period. Additionally, the data is categorized by municipality and province.

The report highlights that the aggregated budgeted revenue for 2024/25 is R652.3 billion, expected to rise to R687.2 billion in 2025/26 and R728.7 billion in 2026/27. Total municipal ex
penditure for 2024/25 is projected at R649.9 billion, increasing to R682.7 billion in 2025/26 and R720.4 billion in 2026/27, marking a 6.2% increase from the adopted budget for the 2023/24 financial year. It is noted that municipalities will face operating deficits in the 2024/25 financial year as operating expenses grow at a quicker rate than revenue projections. However, the situation is expected to improve in the outer years of the 2024/25 MTREF, with operating surpluses anticipated.

A net deficit of R2.1 billion is forecasted for the 2024/25 financial year, after accounting for revenue from external loans and internally generated funds. This marks an improvement compared to a R9.3 billion deficit in the 2023/24 adjusted budget and is expected to result in a net surplus of R520.4 million in 2025/26 and R4.3 billion in 2026/27. The primary cost drivers are employee-related costs and materials, and bulk purchases, which constitute 26.9% and 34.5% of the operating expenditure, respectively. Municipalities ar
e experiencing a dual impact of high electricity and water tariff increases, reduced sales due to changes in consumption patterns, and increased bad debt resulting from affordability pressures.

Capital expenditure is set to increase by 1.8% to R77.4 billion in 2024/25, compared to the original budget for the 2023/24 financial year. However, the percentage of capital expenditure relative to total expenditure is projected to decline over the MTREF period. Capital expenditure accounted for 12.4% of total expenditure in 2023/24, and is expected to decrease to 11.9% in 2024/25 and further to 10% in 2026/27. Trading services make up 51.5% of the total capital expenditure of R77.4 billion in 2024/25, increasing to 51.9% in 2025/26 and 54.3% in 2026/27.

The 2024/25 capital expenditure budget includes a R47.1 billion investment in new infrastructure, representing 60.8% of the total aggregated capital budget. Investments in the renewal and upgrading of existing assets are significantly lower, at R13.3 billion (17.2%)
and R17 billion (22%) of the total capital budget, respectively. Operational repairs and maintenance figures have been institutionalized as part of Section 71 in-year reporting, with municipalities allocating R33.9 billion to repairs and maintenance of assets in 2024/25, increasing to R35.6 billion in 2025/26 and R37.1 billion in 2026/27.

National Treasury publishes Local Government MTREF information annually. Regularly published budget information allows communities to hold their municipal councils accountable. The data is also utilized by National Treasury as the basis for the In-Year Management, Monitoring and Reporting System for Local Government (IYM). The Section 71 reports published by National Treasury provide an account of actual revenue collection and expenditure by municipalities, quarterly, against their budgeted figures. This information feeds into Municipal Money, the open local government data portal, accessible at www.municipalmoney.gov.za, and the Municipal Money time series data is availabl
e at http://municipaldata.treasury.gov.za. Additionally, the GoMuni portal, which enhances transparency, can be accessed at https://lg.treasury.gov.za/ibi_apps/signin by clicking on the public access tab.