The Western Cape province has emerged as a stronghold of financial stability in South Africa, as five of its municipalities have secured top positions in terms of fiscal strength.
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These findings stem from the comprehensive assessment conducted by Ratings Afrika, which examined the financial performance of 104 major municipalities, including all eight metros, for the period ending in June 2022. The Municipal Financial Sustainability Index highlighted the exceptional performance of the Western Cape, showcasing its dominance in ensuring fiscal soundness.
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In the Western Cape, the municipalities of George, Mossel Bay, Cape Town, Saldanha and Swartland have achieved the highest scores according to the index.
- George scored 71
- Saldanha Bay scored 72
- Mossel Bay scored 70
- Swartland scored 70
- Cape Town (metro) scored 68
This scoring metric evaluates various financial components to gauge a municipality’s overall performance.
The six components considered, each being scored out of 100 are:
- Operating performance
- Liquidity management
- Debt governance,
- Budget practices,
- Affordability, and infrastructure development
These municipalities have excelled across these financial dimensions, showcasing their commendable financial management and performance. According to the compilers of the index, their analysis spanning five years has demonstrated the impressive ability of these municipalities to effectively manage their financial affairs.
The tracked municipalities have proven their capability to strike a balance between revenue collection, debt repayment, service delivery and infrastructure investment, all while upholding sound financial records.
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Picture: Brett Alec Fester