Summary
National Treasury Local Government Report – Q2 2024/25
The National Treasury has released its report on how South Africa’s municipalities managed their money during the second quarter (July to December) of the 2024/25 financial year.
Key Highlights:
Spending: Municipalities spent R287.5 billion, which is 44% of their total annual budgets.
Income: They collected R325.5 billion, about 50% of their yearly revenue projections.
Infrastructure (Capital) Spending: Only 18.4% of the infrastructure budget was used — a sign of delays in development projects.
Salaries & Wages: About 47% of the salary budget was already spent by December 2024.
Debt and Collections:
Households owe municipalities R291.1 billion, the biggest portion of unpaid bills.
Municipalities themselves owe R128 billion to suppliers — a sign of possible cash flow problems.
Actual payment collection was 83.7%, lower than the 88.8% target.
Conditional Grants (Special Government Funds):
Government allocated R44.1 billion, but only 29.1% has been spent by municipalities.
Several key grants — like those for disaster recovery and public transport — were underutilized (spent less than 40%).
Non-Financial Performance:
The report also reviewed how municipalities performed in service delivery (e.g. electricity, water, waste management).
This helps ensure that money spent leads to real improvements for residents.
What This Means:
Municipalities need to improve how they spend funds and collect revenue.
There are serious challenges in delivering services and paying off debt.
The Treasury uses this report to monitor progress and help local governments improve
The South African National Treasury has officially released its second-quarter report for the 2024/25 financial year. This detailed analysis outlines how local municipalities performed against their approved budgets for the period ending 31 December 2024. It includes revenue collection, expenditure patterns, and insights into conditional grants and non-financial metrics based on MFMA Circular No. 88. National Treasury Local Government Report Q2 2024/25.
For full access to the report, visit the National Treasury’s official website.
Key Financial Highlights
- Total Expenditure:
Municipalities spent R287.5 billion, representing 44.2% of the total adopted expenditure budget of R649.9 billion. - Revenue Collection:
Billed and other revenue reached R325.5 billion, or 49.9% of the R652.3 billion revenue budget. - Capital Expenditure:
R14.3 billion was spent, which is 18.4% of the R77.4 billion adopted capital budget. - Operating Expenditure:
R273.2 billion of the R572.5 billion operating budget was spent, amounting to 47.7%. - Salaries and Wages:
Municipalities allocated R162.6 billion toward salaries, a 5.2% increase from 2023/24. R76.7 billion (47.1%) has been spent so far.
Municipal Debt and Collection Rates
- Consumer Debtors:
Outstanding consumer debt reached R405.1 billion. Household debt accounts for R291.1 billion (71.9%). - Bad Debt:
R2.6 billion (0.7%) has been written off. - Government Debt:
Accounts for R22.7 billion (5.6%) of the total. - Creditors:
Municipalities owe R128 billion. The Free State, Mpumalanga, and Limpopo show the highest debt beyond 90 days. - Collection Rates:
Average year-to-date collection was 83.7% against a target of 88.8%. Metros collected 87.9%, secondary cities only 68.4%.
Explore more about how municipal budgets work.
Conditional Grants Overview
Municipalities were allocated R44.1 billion in direct conditional grants, with only R28.2 billion transferred and R12.8 billion (29.1%) spent.
Underperforming Grants (<40% spent):
- Municipal Disaster Recovery Grant (MDRG): 16.9%
- Integrated National Electrification Programme (INEP): 38.4%
- Metro Informal Settlements Partnership Grant (ISUPG): 34.7%
- Neighbourhood Development Partnership Grant (NDPG): 33.2%
- Public Transport Network Grant (PTNG): 22%
- Rural Roads Asset Management Systems Grant (RRAMS): 28.8%
Top Performing Grants:
- Integrated Urban Development Grant (IUDG): 52%
- Municipal Infrastructure Grant (MIG): 54.9%
Read our guide: Understanding Conditional Grants
Non-Financial Performance – Circular No. 88
The report includes non-financial performance indicators aligned with MFMA Circular No. 88, improving transparency and accountability. Metrics cover:
- Service delivery outcomes
- Operational effectiveness
- Value-for-money benchmarks
Explore the circular in more detail here: MFMA Circular No. 88 Explained
Download the Full Report
Access detailed annexures and municipal performance data on the National Treasury website or view financial dashboards on the Municipal Money platform.