August 26 2025 13:30
SOUH AFRICA
For the first time in South Africa’s history, the financial health of the nations municipalities will take centre stage on a national platform, not for criticism but for celebration.
This is according to the South African Property Owners Association (SAPOA), which in partnership with Ratings Afrika and the Banking Association of South Africa (Basa) has launched the SAPOA | Ratings Afrika Municipal Performance Award, the “first national accolade to honour municipalities that demonstrate not just basic compliance but true excellence in governance, fiscal discipline and service delivery”.
SAPOA approached Ratings Afrika in 2024 with the idea of launching these awards at its annual conference. The concept is bedded on the significant importance of the existing Ratings Afrika analytical tool which has been developed and implemented over the past 15 years.
The award will recognise local governments that balance their books, safeguard public resources, invest in
infrastructure and create the conditions for communities and businesses to thrive, Sapoa said.
SAPOA’s President, Itumeleng Mothibeli, MD of Vukile Property Fund said: “In a sector where dysfunction often dominates the headlines, these awards will shine a spotlight on the outliers, the municipalities that prove financial sustainability is possible and that it can be the foundation for economic growth and prosperity.
According to Ratings Afrika’s 2024 Municipal Financial Sustainability Index (MFSI®), the vast majority of South Africa’s 115 largest municipalities are in deep financial distress.
Collectively, they recorded R35.3bn in operating deficits last year, money they didn’t have, spent on services they could not sustainably fund.
Liquidity shortfalls ballooned to R104.9bn, up R20bn from 2023, leaving municipalities unable to pay service providers like Eskom and water utilities on time.
“It’s a crisis that hits residents and businesses alike. Ageing roads go unrepaired, water treatment plants limp along, and power cuts intensify. In some municipalities, service delivery is collapsing outright, a reality that drives up costs for property owners, undermines investor confidence and chokes economic growth,” said Sapoa’s CEO Neil Gopal.
Yet amid the decay, a handful of municipalities stand out as models of fiscal discipline and good governance. They balance their books, collect revenues efficiently and invest consistently in infrastructure, proving that financial sustainability is still possible in South Africa’s municipal sector,” he said.
Sapoa said judging would be based on: “Ratings Afrika’s six financial components, a comprehensive benchmark of fiscal health that measures a municipality’s ability to generate operating surpluses to fund services, maintain sufficient cash reserves to absorb shocks, practise prudent borrowing and repayment, apply disciplined and forward-looking budgeting, keep rates and tariffs affordable and invest consistently in infrastructure to strengthen resilience and sustain long-term service delivery”.
“A municipality’s financial health directly affects the property sector’s ability to grow,” said
Sapoa President, Itumeleng Mothibeli.
“When service delivery is reliable and infrastructure is maintained, property values rise, businesses invest, and communities thrive. We want to hold up the municipalities that get this right as examples for the rest of the country,” he said.
alistair@propertyflash.co.za
