Cape Town – Municipal income of South Africa’s 278 municipalities has gone up by R25.5 billion from all sources of income for the financial year ended 30 June 2015.
Statistics South Africa (Stats SA) Statistician General, Dr Pali Lehohla, said this when he released the results of the Financial Census of Municipalities, in Pretoria, on Wednesday.
He said municipalities collectively made an income of R309 billion as of June 2015, compared to an income of R283.5 billion that was generated in 2014.
“The key findings of the census is that there has been increases across all services – purchases of water, purchases of electricity, sales of water, sales of electricity, grants and subsidies – all those are up, and then employment-related costs [are also up].
“In terms of where this has occurred, Gauteng will always have the lion’s share…,” he said.
The Statistician General said the largest contributor to municipal revenue was grants and subsidies received (31.0%), followed by electricity sales (28.3%), property rates (14.7%).
He said other revenue, which consist of fines, licenses and permits, public contributions and donations accounted for 11.2% of the income, while 3.7% came from sewerage and sanitation charges, with refuse removal contributing 2.8%.
Municipal spending on the rise
Dr Lehohla said results of the census showed that municipalities spent a total of R289.3 billion in 2015.
He said the biggest contributor to municipal total operating expenditure was employee-related costs (25.6%), followed by electricity purchases (21.7%), depreciation and amortisation (9.3%), other expenditure such as collection costs, loss on disposal property, plant and equipment, impairment loss (9.1%) and general expenditure like accommodation, travel and subsistence costs, audit fees, bank charges, consultancy and professional fees, fuel and oil, hiring of equipment, insurance costs, subscriptions and membership fees, telecommunications, among others, accounted for 5.4% of all expenditure.
The rest came from bad debts (7.3%), water purchases (5.4%), contracted services (5.0%), repairs and maintenance (5.0%), interest paid (2.7%), grants and subsidies paid (2.4% and remuneration to councillors (1.2%).
Purchases and sales of water and electricity
The Statistician General said purchases of water increased from R13.8 billion in 2014 to R15.3 billion in 2015, and this represented an increase of 11%.
He said sales of water showed an increase of 10.1% – from R23.4 billion to R25.8 billion over the same period.
Electricity sales went up by 6.6% in the same period, from R80.8 billion to R86.1 billion.
Stats SA’s Director for Local Government Institutions Malibongwe Mhemhe said while an observation was made that municipalities generally depend on grants and subsidies to survive financially, metros were “at least are able to generate their own income instead of transfers from government”.
He said on employee related costs, Stats SA noted there was an increase in the number of employees due to the fact that municipalities recruited more interns in the period under review.