The revenue collected by municipalities across South Africa increased by R27 billion in the financial year ending June 2016, in comparison with the previous year, according to the Financial Census of Municipalities results released by Statistics South Africa on Wednesday.
The report, released by Statistician-General Pali Lehohla in Pretoria, showed that the municipalities had received an income of R333 billion from all sources of income, an increase of R27 billion compared to the R306 billion which went into the municipal coffers in 2015.
“What we cover in this presentation are purchases and sales of water, electricity, property rates received, government grants and subsidies and employee related costs. The information comes against the background of municipalities being said to have defaulted on a number of things, particularly this year, with Eskom tightening the screws on them,” Lehohla addressed a media briefing.
He said all 278 municipalities had provided their financial results to StatsSA, enabling the national statistical service to come up with the report released on Wednesday.
StatsSA said the largest contributor to municipal revenue for the year ended June 30, 2016 was “grants and subsidies received” contributing 30.9 percent to municipal coffers, followed by electricity sales at 28.3 percent, property rates received at 14.7 percent.
Funds categorised as “other revenue” which incorporates fines, licences and permits, public contributions and donations added in 11 percent of revenue while water sales brought 8.9 percent, sewerage and sanitation charges raised 3.5 percent and refuse removal charges added 2.7 percent to the municipalities overall collections.
Regarding municipal expenditure patterns, the results shows that municipalities spent a total of R311 billion in 2016.
The largest contributor to municipal total operating expenditure was “employee-related costs” which swallowed 26.3 percent, followed by electricity purchases which took up 22.6 percent. Funds channelled for “depreciation and amortisation” took 8.9 percent from the municipal coffers while “other expenditure” accounted for 8.2 percent.
The municipalities’ bad debts summed up to 6.7 percent of total expenditure, while “contracted services” amounted to 5.9 percent and 5.6 was spent on water purchases. The remuneration of councillors accounted to just over a percentage of the municipalities total spend.
As at June 30, 2016, municipalities owed lenders, suppliers and other creditors a combined amount of R210.7 million — which is 7.5 percent more than what they owed at June 30, 2015. Provinces which registered highest percentage increases between 2015 and 2016 were Free State, Northern Cape, Limpopo and Mpumalanga.