Amathole’s books balance for first time in seven years

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.

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“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.

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