State of City Finances 2018
The State of City Finances Report is one of the flagship publications of the South African Cities Network. It reports on the finances of the nine largest cities in South Africa: Johannesburg, Cape Town, eThekwini, Ekurhuleni, Tshwane, Nelson Mandela Bay, Buffalo City, Mangaung and Msunduzi. This is the fourth State of City Finances Report following previous issues in 2011, 2013, and 2015. The theme of this year’s State of City Finances Report is that citizens and cities are in financial crisis. Immediate challenges to municipal financial health include inadequate finance for delivering required infrastructure and services, and the affordability of municipal services for consumers in a worsening macro-economic environment. This report offers some recommendations and innovative suggestions for tackling the challenges facing cities, especially systemic issues. Cities need to be more assertive about their role in planning and directing investment in the urban space, if they are going to drive the country’s development. The theme of this year’s publication is that cities have to address the systemic problems that affect their ability to achieve the policy goal of developmental local government. The financial function should enable cities to realise spatial transformation, meaning that municipal budgets should be aligned with policy, and urban planning should reflect that orientation. Cities need to find a way to bridge the capital funding gap that prevents their meeting the infrastructure requirements of a steadily increasing urban population.
The 2018 State of City Finances includes the following messages for each chapter:
- City revenues appear to be quite resilient, growing at an average annual rate of about 8% and
with collection rates of about 95%, although most cities have increased their provisions for
- The rapid increase in bulk tariffs is squeezing out the surpluses that cities have historically used to
cross-subsidise other services, while cities are underspending on both repairs and maintenance
and their capital budgets.
- Only with the 2017/18 financial statements and audit reports will it be possible to assess the
impact of the new administrations elected in the 2016 local government elections.