Five years ago, the OR Tambo District Municipality was technically bankrupt, with funds withheld under Section 216, creditors exceeding R441m and the municipality facing a Section 139 intervention.
But delivering his State of the District Address, executive mayor Mesuli Ngqondwana painted a picture of a municipality recovering from its financial crisis.
Irregular expenditure decreased from R1.678bn in the 2021/2022 financial year to R322m in 2025/2026, with no new irregular expenditure on new contracts.
In May 2025, the provincial executive council approved the municipality’s move from the financial rescue phase to the stabilisation phase, with plans under way to move it to the sustainability phase.
“Since our arrival in council, we have been able to table and adopt a credible, funded budget that, for the past years, has been cash-backed and sustainable.
“The municipal budget has grown over the years from R2.6bn in 2021/2022 to more than R3.3bn for the 2026/2027 financial year,” Ngqondwana said.
Revenue collection has improved from 54% to 66%, with the municipality expanding its billing of businesses in peri-urban areas.
In 2022, total creditors exceeded R441.7m, including municipal electricity services from the King Sabata Dalindyebo Local Municipality and Eskom.
These have since been fully paid.
The municipality aims to increase its collection rate to more than 72.8% and has engaged debt collectors to assist with collections, including from businesses in peri-urban areas.
The work of the Municipal Public Accounts Committee and Municipal Disciplinary Board will also be expedited to deal with outstanding irregular expenditure without incurring new balances.
After years of unqualified audit opinions, the municipality is now aiming for a clean audit outcome.
Ngqondwana said outstanding transactions from previous years needed to be addressed for the municipality to achieve this.
A review of the organisational structure resulted in senior management posts being reduced from 11 to six, while posts at micro level were cut from 2,054 to 1,745.
The council also approved a debt incentive allowing residents to settle outstanding debts with an amnesty of 60% for debts paid within one month, 55% within two months, 50% within three months and 40% within four months.