New local government funding model due by October as municipalities receive R178bn

By Thebe Mabanga

South Africa’s municipalities will know by October whether they will receive a larger share of nationally raised revenue. For now, however, they must settle for R178 billion, less than 10% of the national budget presented by Enoch Godongwana, the Minister of Finance.

The allocation comprises R103 billion in equitable share and R57.7 billion in conditional grants.

Municipalities also receive R16.8 billion from the general fuel levy.

Currently, municipalities receive 9.4% of nationally raised revenue, compared with 41.4% allocated to provinces and 49.3% to national departments.

Letsepa Pakkies, Director for Local Government Fiscal Framework at the National Treasury, told Inside Metros that by October, most likely during the Medium-Term Budget Policy Statement (MTBPS), Treasury will unveil an updated funding model for local government, including whether its share of nationally raised revenue will increase.

Edgar Sishi, Deputy Director-General in the Budget Office, said the equitable share allocation across the