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EQUITABLE SHARE – A LIFELINE TO AN EMBATTLED MUNICIPALITY?

Updated: Jul 29, 2022


In the Government Gazette of 15 June this year, a R28.9 billion increase in the allocation of equitable share grants was announced, to be distributed to provinces and municipalities, in terms of Division of Revenue Act 5 of 2022.


What is an Equitable Share Grant?


Equitable Share Grant (ESG) means the unconditional grant from national government paid to local government, predominantly targeted at assisting municipalities with the cost of free basic municipal services to the poor.The amount of equitable share a municipality receives depends on a number of components such as the size of its low-income population, the cost of basic services and its capacity to raise its own revenue.


How will Mafube benefit from the ESG?


The national department responsible for local government must transfer a municipality’s equitable share to the primary bank account of the municipality.A total amount of R118 903 000 has been allocated to Mafube for the 2022/3 financial year which will be paid over in three transfers on 6 July 2022, 7 December 2022, and 15 March 2023. This will be increased to R127 257 000 and R136 313 000 over the next 2 years. What this means for the embattled municipality with a monthly bill for salaries and remuneration of councillors exceeding R12M, is that it will be scarcely enough to meet its commitments in this regard. The relief for the municipality will be temporary and very little will remain for service delivery, so again taxpayers have to foot the bill for keeping politicians and a bloated municipal workforce in employ, while the poor, for whom the Equitable Share Grant is intended, will get no relief.


Registration of indigents – why is this so important?


The largest contributor to the ESG is the basic services component. This is an allocation granted to each municipality, calculated by multiplying the monthly subsidy per household, by the updated number of households below the affordability threshold (indigents) in each municipal area. In order for adjustments to be made and the ESG increased year on year, it is the responsibility of each municipality to furnish an updated list of indigents to Treasury on a regular basis. Astonishingly, despite the desperate situation many residents find themselves in and the evident increase in indigent households over the last few years, Mafube have apparently not done so since 2013!


Mafube Business Forum(MBF) have brought the matter under the attention of the leader of the provincial intervention team and is currently engaging in a drive to get indigents from all groups of the Mafube community registered. This will lead to an increase of the ESG to the municipality and enable the delivery of basic services to the poor.


Residents, business owners and ratepayers are welcome to visit our offices at 18A Church Street during our business hours, on Mondays to Thursdays from 08h30 to 16h00 and Fridays from 08h30 to 12h30, or contact Marina on WhatsApp at 079 145 4295. Or send an email to info@mafubebf.org


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