The Amathole District Municipality has for the first time in seven years achieved a fully funded budget.
This brings to a halt years of the municipality operating with a budget that was far above the revenue collected.
As the Amathole District Municipality (ADM) is set to enter the 2026/2027 financial year, the books have balanced for the district which endured a Section 139 constitutional intervention in 2021.
This led to the provincial treasury lending some assistance to the ailing municipality to manage its finances and its service delivery.
The municipality was placed under intervention because of financial distress as a result of escalating creditors and deteriorating infrastructure.
The funded budget follows the qualified audit outcome that the municipality received, the first time in five years.
A virtual council meeting last week approved a budget of R2.8bn for the 2026/2027 financial year which includes a Water Services Infrastructure Grant (WSIG) of R110m (a 10.42% increase) to accelerate access to water and sanitation across the district, and a Municipal Infrastructure Grant (MIG) of R518,479,000 funding infrastructure delivery across all six local municipalities.
Additionally, the council meeting saw approval for the adjustment of tariffs for water and all other services, which were adjusted by 6% and the approval for indigent households in the district to continue to receive 6 kilolitres of free basic water monthly.
Municipal spokesperson Sisa Msiwa said the achievement of a funded budget would mean there would be greater certainty that planned services would actually be delivered for the communities of the Amathole District.
“For a number of years preceding the current political term, ADM was trapped in a cycle of poor governance that produced unfunded budgets, deteriorating audit outcomes, and an institution that was spending beyond what it could sustain,” Msiwa said.
“The structural challenges of operating in one of the most rural and economically marginalised districts in SA — low revenue collection rates, an indigent consumer base, escalating bulk service costs — are real and significant.
“An unfunded budget creates a situation where commitments made on paper cannot be honoured in practice.
“Projects stall, maintenance is deferred, and communities bear the consequences.
“A funded budget changes that equation.
“The R110m allocated through the Water Services Infrastructure Grant will be available for water and sanitation projects across the district, accelerating access for households that currently lack reliable services.
“The R518m Municipal Infrastructure Grant will fund infrastructure delivery across all six local municipalities: Mbhashe, Mnquma, Great Kei, Amahlathi, Ngqushwa and Raymond Mhlaba.”
Msiwa said the new leadership which took political office in 2022 was working towards sustaining such highs.
Amathole mayor Anele Ntsangani said this budget was proof that “sustained institutional effort yields results”.
“For the first time in over seven years, we are presenting our communities with a funded budget, one that allows us to plan with certainty, deliver with purpose and account with integrity.
“Our communities have borne the consequences of financial instability for too long.
“This is a commitment renewed and a foundation being rebuilt,” Ntsangani said.
Eastern Cape co-operative governance and traditional affairs spokesperson Mamkeli Ngam said the department was encouraged that its efforts and intervention were contributing towards a more reliable municipality in the ADM.
“This is quite an encouraging development in that Cogta’s intervention has borne some fruit towards financially stabilising the municipality and entrenching the principles of good governance.
“This milestone has been made possible by the support from internal stakeholders in ADM in the interest of co-operative governance,” Ngam said.
Provincial treasury spokesperson Phumelele Godongwana said the municipality was working closely with the provincial treasury, whose support had been instrumental in driving these improvements.
“The provincial treasury has provided sustained technical and institutional support through continuous capacity-building initiatives for the municipal public accounts and bid committees aimed at strengthening oversight and reducing irregular expenditure,” Godongwana said.
“The provincial treasury has monitored and provided feedback on the municipality’s budget funding plan and deployed a municipal finance improvement programme (MFIP) adviser to provide hands-on technical assistance.
“This support has been positively received by the municipality and continues to contribute meaningfully to its financial recovery and institutional strengthening.
“Though initial progress under the Section 139(5)(a) intervention was slower than anticipated, the municipality’s recent efforts are beginning to yield the desired outcomes.”
Daily Dispatch
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