Note to Editors: Please find attached English and Afrikaans soundbites by Werner Pretorius MPL and Sesotho soundbite by Jafta Mokoena MPL
The latest quarterly provisional financial reports confirm what residents of the Free State experience daily, municipalities are financially collapsing, drowning in debt, and failing to deliver basic services. Instead of spending public money on repairing water pipes, maintaining electricity networks, or upgrading infrastructure, municipalities are underspending on grants, running up billions in unpaid debt, and operating far beyond their means.
The recently tabled Section 71(1) Financial Reports on the state of finances of local government in the Free State reiterate the dire state of financial management of municipalities as was exposed during the joint parliamentary oversight on local governments in the province.
These reports, although preliminary, paint a bleak picture of mismanagement across the province, from dismal revenue collection and collapsing infrastructure budgets to municipalities owing more to creditors than they can ever hope to recover.
- Revenue collapse: Many municipalities are collecting only a fraction of what they should, crippling service delivery. Nala (10.5%), Phumelela (20%) and Mafube (21.4%) are the worst, far below the 95% norm. Others like Mohokare, Kopanong and Letsemeng can’t even provide reliable figures because of chaotic systems.
- Spending beyond their means: Municipalities ran up a combined R2 billion deficit by June 2025, showing they are operating in the red.
- Failure to use grant funding: By year-end, municipalities are projected to underspend by R807 million in conditional grants meant for development. Mangaung Metro alone is projected to underspend by nearly R589 million (55%), depriving residents of desperately needed improvements.
- Infrastructure neglected: Money for water, electricity, and waste infrastructure projects is not being used optimally. Lejweleputswa (6.3%), Mohokare (7.9%) and Letsemeng (6.7%) spent almost nothing, often using capital project funds to cover salaries and running costs instead.
- Maintenance ignored: Municipalities are spending only 2.9% of their budgets on repairs and maintenance, far below the 8% norm. This means income-generating infrastructure is breaking down faster, reducing revenue and worsening service delivery.
- Debt crisis: Residents, businesses and even government departments owe municipalities R43.5 billion. Households make up the largest share, at R31.8 billion, with Mangaung (R12 billion), Matjhabeng (R8.3 billion) and Metsimaholo (R3.9 billion) being hardest hit.
- Creditors unpaid: Municipalities themselves owe R36.5 billion, mostly to Eskom and water boards. Matjhabeng leads with R15.2 billion, followed by Maluti-a-Phofung (R8.2 billion) and Ngwathe (R2.8 billion).
- Unfunded budgets: Only 9 of 23 municipalities passed balanced budgets for 2025/26. The rest are spending money they don’t have.
The Office of the Premier, MEC of CoGTA and Provincial Treasury will have to go back to the drawing board to ensure effective support is provided, to turn around the tide of poor financial management in the province, and to ensure consequence management is implemented. The DA will continue to call for the quarterly tabling of the reports in the legislature to serve as an early warning system and to ensure continued monitoring, accountability, and intervention where needed.
Local governments in the Free State will only be able to deliver quality basic services, grow the economy and create job opportunities when sound financial and performance management is implemented. The DA will continue to monitor the financial performance of municipalities across the Free State and demand accountability for poor financial decision-making, systems and wastage of public funds. Residents of the Free State deserve quality basic services to unlock social and economic opportunities to better their lives.