Article re-cap
- Cape Town scored 71 on the Municipal Financial Sustainability Index, compared to a metro average of 36, making it the only metro classified as highly financially sustainable.
- The city's revenue collection rate stands at 98%, well above the metro average of 85.3%.
- Cape Town has committed a record R40 billion to infrastructure investment over the next three years.
- Key allocations include R16.7 billion for water and sanitation, R6 billion for electrical grid upgrades, and R3.2 billion for the MyCiTi Cape Flats expansion.
- Ratings Afrika warned that without decisive intervention, municipalities risk remaining trapped in a cycle of operating losses and declining service delivery.
Cape Town has been identified as the only metropolitan municipality in South Africa classified as highly financially sustainable according to the latest Municipal Financial Sustainability Index.
The Ratings Afrika report released on 9 July gave Cape Town an overall score of 71, which is 35 points above the national average of 36 for other metros. The report stated that the city's strong financial position provides the capacity to invest in infrastructure unlike other cities.
Cape Town mayor Geordin Hill-Lewis said on Friday that the recognition affirms progress in avoiding the collapse of infrastructure and services seen in other cities. He noted that good governance enables a record R40bn investment in basic infrastructure over the next three years while offering the lowest property rates of South Africa's cities.
The city maintains a revenue collection rate of 98%, compared to an average metro collection rate of 85.3%, according to the report. This financial stability supports significant allocations, including R16.7 billion for water and sanitation projects such as wastewater works upgrades and a R2 billion pipe replacement programme.
Infrastructure spending includes R6 billion for electrical grid upgrades, R3.7 billion for roads and stormwater maintenance, and R653 million for congestion relief. The city has also set aside R3.2 billion for the MyCiTi Cape Flats expansion and R3.3 billion for informal settlement upgrading and state-subsidised housing. Sports facilities will see R203 million in upgrades, and the Strandfontein Pavilion redevelopment has been allocated R300 million.
The mayor stated that 75% of infrastructure spending will directly benefit lower-income households and that 130,000 construction-related jobs will flow from these investments. Ratings Afrika nonetheless cautioned that, without decisive intervention, municipalities will remain trapped in a cycle of operating losses, worsening liquidity shortages and declining service delivery.
This follows earlier local coverage of Mayor defends revised R87 billion Cape Town budget.
Frequently asked questions
How did Cape Town rank compared to other South African metros in financial sustainability?
Cape Town was identified as the only metropolitan municipality in South Africa classified as highly financially sustainable, scoring 71 on the Municipal Financial Sustainability Index, which is 35 points above the national average of 36 for other metros.
What is Cape Town's revenue collection rate and how does it compare nationally?
Cape Town maintains a revenue collection rate of 98%, significantly higher than the average metro collection rate of 85.3%. This strong collection supports the city's financial stability and infrastructure investments.
How much is Cape Town investing in water and sanitation over the next three years?
Cape Town has allocated R16.7 billion for water and sanitation projects, including wastewater works upgrades and a R2 billion pipe replacement programme as part of the overall infrastructure spending plan.
Which communities will benefit most from Cape Town's planned infrastructure spending?
The mayor stated that 75% of infrastructure spending will directly benefit lower-income households. This includes R3.2 billion for MyCiTi Cape Flats expansion, R3.3 billion for informal settlement upgrading and state-subsidised housing.
Source: novanews.co.za
