Municipalities receive R33.9bn tranche for basic services

Municipalities across the country have received their share of the R33.9 billion first tranche of the Local Government Equitable Share (LGES).

Cooperative Governance and Traditional Affairs spokesperson, Lungi Mtshali, said the tranche was transferred to the primary bank accounts of the municipalities.

In a statement, the ministry said the LGES allocation will be transferred in three tranches during the current local government financial year, which begins in July.

The transfer of the LGES to all municipalities is premised on Section 216 of the Constitution. The section provides for national government to transfer resources to municipalities in terms of the annual Division of Revenue Act (DORA) to assist them in exercising their powers and performing their functions.

Mtshali said the equitable share provides funding for municipalities to deliver free basic services to poor households and subsidises the cost of administration. It also covers other core services for those municipalities with the least potential to cover these costs from their own revenues.

“The basic services component of the LGES provides a subsidy of R488.42 per month in 2022/23 for the cost of providing basic services to each of these poor households,” said Mtshali.

The subsidy includes funding for the provision of:

– Free basic water (six kiloliters per poor household per month) (R168.22 per household below the affordability threshold).
– Energy (50 kilowatt-hours per month) (R107.04 per household below the affordability threshold).
– Sanitation (R115.95 per household below the affordability threshold).
– Refuse removal (R97.20 per household below the affordability threshold).

“The allocation to municipalities will assist them in, amongst other things, delivering free basic services to poor households through, for example, indigent support programmes.

“These programmes ensure that qualifying households, who are unable to pay for certain basic services, and have access to water, electricity, sanitation and refuse removal receive these services for free or at greatly reduced rates,” said Mtshali.

He said COGTA Minister, Dr Nkosazana Dlamini Zuma, called on those households who are unable to pay for basic services to contact their local municipalities to determine if they qualify to be beneficiaries of their local indigent support programme.

The Minister has further urged municipal councils to ensure that Municipal Public Accounts Committees (MPACs) are established and fully functional to facilitate the proper oversight of expenditure in municipalities, as stipulated in the Municipal Structures Act.

Mtshali said the department will continue to coordinate national and provincial government support for local municipalities to deliver basic services and to put in place better audit mechanisms, as this is a major challenge facing the sector.

The department, he said, “is coordinating and collaborating with sector departments to support municipalities, as envisaged by Section 154 of the Constitution, through the District Development Model (DDM) approach”.

“Notwithstanding the transfer of the LGES to municipalities, revenue collection remains a critical determinant of the financial viability of municipalities. Citizens are still responsible for paying municipalities for the services they receive.

“We urge citizens to pay for the services they receive so that municipalities can collect revenue and provide quality services to the communities, as municipalities need to have access to adequate sources of revenue to enable them to undertake the functional responsibilities assigned to them,” he said.