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Midvaal and Saldanha Bay lead as top financially well-controlled municipalities



financially well-controlled municipalities

MIDVAAL Local Municipality in Meyerton, Gauteng, has once again been recognised as one of the top-performing financially well-controlled municipalities in South Africa, according to Ratings Afrika’s annual Municipal Financial Sustainability Index (MFSI). Sharing this prestigious distinction with Saldanha Bay in the Western Cape, Midvaal has demonstrated its commitment to sound financial management for the second consecutive year, per IOL.

The MFSI evaluates various financial components, including operating performance, liquidity management, debt governance, budget practices, affordability, and infrastructure development. Ratings Afrika assessed 112 municipalities, including metro councils, for the financial year ending in June 2022.

In their report, analysts Leon Claassen and Charl Kocks highlighted that despite the poor performance of several municipalities, there are still municipalities that exhibit commendable financial management and a steadfast dedication to maintaining a high level of financial stability. Midvaal and Saldanha Bay emerged as the most financially sustainable municipalities in 2022, each achieving a score of 72 on the index. George scored 71, while Mossel Bay and Swartland (Malmesbury) earned 70.

These high-scoring municipalities have demonstrated consistency over five years, attributing their success to well-established financial policies and long-term strategies. They adhere to sound budgetary practices, stringent financial control, and effective revenue collection, even in challenging economic conditions. The unprecedented levels of financial sustainability position these municipalities strongly for infrastructure investment and provide them with the capacity to withstand financial shocks.

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Cape Town stood out as the only financially sustainable metro in 2022, scoring 68, surpassing other metros by a considerable margin. Cape Town’s accomplishment can be because of an operating surplus of R1.8 billion and cash reserves of R9.4 billion, which can be utilised for infrastructure development and as a substantial buffer against financial shocks.

However, not all municipalities fared well in the assessment. Rand West Municipality in Randfontein, Westonaria, Mangaung, and Tshwane in Gauteng demonstrated extremely low financial stability. Mangaung reported an operating deficit of R1.9 billion, while Tshwane’s deficit reached R4.2 billion. Both municipalities face liquidity deficits and cannot meet their obligations to service providers, including Eskom and water utilities.

In response to the outcomes, Mayor Peter Teixeira of Midvaal Local Municipality expressed his commitment to pursuing financial excellence for the betterment of the municipality’s residents. The recognition received by Midvaal highlights the municipality’s dedication to responsible financial management. Furthermore, it sets an example for others to follow.

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Picture: Twitter / PeterTeixeiraEM

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