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Mangaung Metropolitan Municipality
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MTREF Budget 2023/24 – 2025/26 & Budget Related Policies

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The 2023/26 MTREF budget is prepared in compliance with the MFMA (No 56 of 2003). The MTREF is a financial plan that enables the municipality to achieve its vision and mission through the lOP Strategy which is informed by the development agenda and community / stakeholder inputs. Section 153 of the Constitution requires that ‘a municipality must structure and manage its administration and budgeting and planning processes to give priority to the basic needs of the community, and to promote the social and economic development of the community’. The MFMA, together with the Municipal Systems Act (2000), aims to facilitate compliance with this constitutional duty by ensuring that municipalities’ priorities, plans, budgets, implementation actions and reports are properly aligned.

Since the 2008 global financial crisis, which have been further exacerbated by the recent COVIO pandemic, economic growth has trended downwards, resulting in persistent shortfalls in tax revenue that have not been matched by adjustments to spending growth. This in turn has led to wider budget deficits, higher borrowing, and a rapid increase in the ratio of debt to GOP. The reason that the debt servicing costs are growing at a pace that is faster than the rate of GOP growth, and this ratio will continue to increase until government runs a sufficiently large primary budget surplus.

The economic outlook faces a range of risks, including weaker-than-expected global growth, further disruptions to global supply chains and renewed inflationary pressures from the war in Ukraine, continued power cuts and a deterioration in port and rail infrastructure, widespread criminal activity, and any deterioration of the fiscal outlook. The 2023/24 – 2025/26 medium-term expenditure framework (MTEF) is tabled at the time when government continues to confront a challenging economic environment. As a result, the city’s revenue projections have been sharply reduced and spending pressures continue to mount. The combination of lower revenue and increased spending continue to put pressure on service delivery.

The city was placed under national intervention in in terms of section 139(7) of the Constitution of the Republic of South Act, 1996 (“the Constitution”) read with of section 150 of the M FMA from April 2022. This led to the appointment of the National Cabinet Representative and a multidisciplinary team of experts in governance, financial management, service delivery and institutional pillars of municipal sustainability to assume the responsibility to implement the financial recovery plan on behalf of National Cabinet.

Budget and Related Policies