The Democratic Alliance (DA) can reveal that Merafong Local Municipality faces a serious financial and operational crisis. Official documents, including the February 2026 Adjustment Budget and January 2026 Section 71 Report, show the municipality is in severe financial distress.
Merafong City is under a Financial Recovery Plan and classified in a “Rescue Phase.” Although a balanced budget was presented, Provincial Treasury has declared it unfunded, meaning there is not enough cash to meet planned expenses. Revenue collection stands at only 54%, below the required 65%.
Major losses stem from poor infrastructure management. Electricity losses are at 50.10% and water losses at 38.78%, far above acceptable levels. Bulk service debt totals R3.35 billion, owed to Eskom and Rand Water, with payment arrangements not honoured.
Administrative failures include a collapse of the financial system, preventing completion of key budget tables. Despite the cash crisis, spending on consultants rose to R304 million, while overtime costs exceeded the budget by 10.69%.
The municipality also lost R34.5 million in grant funding due to poor management. Outstanding debt owed to the municipality totals R7.3 billion, including R2.7 billion from mining houses. Collection rates remain low at 57%, and widespread electricity meter tampering suspected.
With a negative financial position and inability to pay creditors within 30 days, Merafong City risks a total collapse of service delivery unless urgent action is taken.