The National Treasury has published the operating and capital budgets of municipalities as adopted by their respective councils to enable communities to hold their municipal councils to account.
“These budgets give an overview of expected revenue and expenditure trends in Local Government over the next three years, referred to as the 2025/26 Medium Term Revenue and Expenditure Framework (MTREF),” National Treasury said on Monday.The operating and capital budgets of municipalities are available on National Treasury’s website.The revenue and expenditure numbers are aggregated from the annual budgets that municipal managers are legally required to submit to the National Treasury and the relevant Provincial Treasury. The information is also used by the National Treasury as the basis for the In-Year Management, Monitoring and Reporting System for Local Government (IYM).
The Section 71 reports published by the National Treasury provide a quarterly account of actual revenue collection and spending by municipalities against their budgeted figures.
All this information is uploaded into the Municipal Money open Local Government data portal and can be accessed as follows: www.municipalmoney.gov.za . Highlights include:- The aggregated budgeted revenue for 2025/26 is R675.8 billion, which is expected to increase to R712.6 billion in 2026/27, and R753.5 billion in 2027/28.
- Total municipal expenditure in 2025/26 is estimated to be R698.0 billion, increasing to R728.3 billion in 2026/27, and R764 billion in 2027/28. Total expenditure for 2025/26 is 7.4 % higher than the adopted budget for 2024/25 financial year.
- It is notable that aggregate municipalities will realise operating deficits on the operating budgets in the 2025/26 financial year as the total operating expenditure increases at a higher rate than the revenue projections. This is an indication that municipalities are spending beyond their means and a first sign of financial challenges. However, the situation is projected to improve in the outer years of the 2025/26 MTREF as the operating deficit is projected to reduce.
- A net surplus of R8.5 billion is projected in the 2025/26 financial year after considering revenue from external loans and internally generated funds. This is an improvement compared to a deficit of R1.9 billion in the 2024/25 adjusted budget and will result in net surpluses of R12.3 billion in 2026/27 and R16.7 billion in 2027/28.
- The main cost drivers are employee related costs and bulk purchases, representing 27.0 % and 35.0% of the operating expenditure respectively. Municipalities are experiencing multiple impacts of the high electricity and water tariff increases; lower sales levels owing to changes in consumption patterns and increased bad debt as a result of affordability pressures.
- Capital expenditure increased by 1.9 % to R78.9 billion in 2025/26 compared to the original budget for the 2024/25 financial year. The percentage of capital expenditure, to total expenditure is declining over the MTREF period. Capital expenditure represented 11.3% of the total expenditure in 2025/26 and is projected to decrease to 10.5% in 2024/25 and further decrease to 9.8 % in 2027/28.
- Trading services represent 52.1% of the total capital expenditure of R78.9 billion in 2025/26; increases to 54.7% in 2026/27 and to 56.7% in 2027/28.
- The 2025/26 capital expenditure budget reflects a R45.7 billion investment in new infrastructure which is 57.9% of the total aggregated capital budget. Investment in the renewal and upgrading of existing assets is much lower at R14.9 billion (18.8 %) and R18.4 billion (23.3%) of the total capital budget respectively; and
- Reporting on operational repairs and maintenance figures has been institutionalised as part of Section 71 in-year reporting. Municipalities allocated R38.3 billion to repairs and maintenance of assets in 2025/26. This will increase to R40.6 billion in 2026/27 and to R42.7 billion in 2027/28.
