Unfunded Mandates in South African Local Government: The Financial and Administrative Burden on Municipalities

Municipalities Strained by Unfunded Mandates

South African municipalities are facing severe financial strain due to unfunded or underfunded mandates—services assigned by provincial governments without sufficient funding. This has led to major budget shortfalls, with cities like Cape Town and eThekwini reporting deficits in the billions.

Essential services such as healthcare, housing, libraries, and transport are affected. The problem is rooted in a misalignment between legislative duties and financial support, made worse by restrictive laws like the Government Immovable Asset Management Act.

Past efforts by National Treasury to resolve these issues have fallen short, while rising costs continue to outpace available grants. Proposed solutions include full financial transfers, fairer funding mechanisms, and constitutional reform. A coordinated response is seen as vital to ensuring continued service delivery and municipal stability.

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