One South African municipality in deep trouble

A government committee has raised the alarm bells over Merafong City Local Municipality, as the city finds itself in deep financial and operational trouble.

Merafong in the West Rand District of Gauteng is deeply in debt, and areas across the city have gone without water and electricity for over a month.

Merafong Municipality incorporates several areas, including Carletonville, Khutsong, Fochville, Kokosi, Greenspark, Welverdiend, Wedela, Blybank and Mining Towns.

On 19 August, the Gauteng Provincial Legislature’s Portfolio Committee on Cooperative Governance and Traditional Affairs (CoGTA) met with the Department of CoGTA and Merafong.

This meeting was intended to assess the municipality’s financial viability and service delivery performance.

It came after the committee expressed deep concern over Merafong’s deteriorating financial and governance position, which has exposed the municipality’s residents to prolonged service disruptions.

The committee said towns like Welverdiend have endured electricity outages lasting more than a month due to transformer failures.

In addition, water provision in the area has been compromised by the municipality’s R1.4 billion debt to Rand Water. 

“Although a payment of R50 million secured partial restoration, only about 80% of water supply has resumed, and full restoration remains uncertain,” the committee said in a statement. 

It said the municipality’s own performance assessment shows that only 34% of service delivery targets were achieved in the past financial year.

In addition, Merafong has been accused of appointing a Deputy CFO in April 2024, despite the fact that no such position exists.

This portfolio committee is not the first government entity to raise concerns about Merafong’s performance. Earlier in 2025, the National Council of Provinces (NCOP) considered a petition from residents of Khutsong.

The NCOP’s report, adopted on 1 April 2025, raised alarm over ageing infrastructure, unreliable transformers, and poor governance in Merafong. 

Among its resolutions, the NCOP directed Gauteng CoGTA to provide structured support, called for monthly progress reports from the municipality, and prioritised the resettlement of informal settlements in hazardous dolomitic zones.

It also instructed that forensic investigations be undertaken into questionable procurement and payments thereof, reckless recruitment, and the appointment of dubious senior officials.

Municipalities in trouble

The municipal issues faced in Merafong have been a matter of concern for some time now. In November 2024, the National Treasury listed Merafong among five municipalities whose funds were withheld for a month over unpaid water bills.

This was part of an effort to compel local governments to pay for basic services, as municipal debt to bulk suppliers has spiralled out of control in recent years.

However, despite crackdowns from the National Treasury and its municipal debt relief programme, Merafong and many other municipalities across South Africa remain deeply in debt to bulk suppliers.

In July 2025, Sipho Mosai, the CEO of Rand Water, which supplies Merafong and many other municipalities, explained that the water issues many South Africans face are due to municipal distribution challenges rather than bulk water suppliers.

Mosai explained that the water crisis South Africa currently faces, which has seen areas of the country go without clean or running water for extended periods, lies at the municipal distribution level.

“It’s a well-known and clearly understood challenge that, at the distribution level, we have high water losses,” Mosai said.

“All the municipalities have acknowledged that the non-revenue water is high and we need to do something about it.”

He added that municipal non-payment for water services is placing serious strain on the bulk supplier’s ability to function.

He revealed that municipal debt to Rand Water has risen from R1.5 billion in 2015 to over R8 billion by the third quarter of 2024/25.

“I think we’re still fine for now. We are able to raise capital in the marketplace, but in the long term, it’s a matter of serious concern for us,” he said.