Mafube – Anatomy of Insolvency

The latest findings by the Auditor-General (AG) paint a deeply concerning picture of the financial state of Mafube Local Municipality (MLM). A thorough analysis reveals that the municipality's situation is even worse than previously believed, with MLM identified as one of the worst-performing municipalities in South Africa.

Despite appointing consultants at considerable cost to prepare its financial statements, the Auditor-General still issued a qualified audit opinion, highlighting severe financial distress and expressing doubt as to whether the municipality can continue as a "going concern." While these findings may not come as a surprise to many residents, they remain a stark reminder of the challenges facing our community.

A Municipality in Financial Crisis

The numbers are alarming.

MLM's liabilities exceed its available resources by R1.4 billion. To put this into perspective, this equates to a debt burden of more than R23,000 for every one of the municipality's approximately 60,000 residents—every man, woman, and child.

At the same time:

71% of treated water generates no revenue, reflecting massive water losses.

The municipality spent 151% of its already unfunded budget, despite legislation prohibiting municipalities from adopting unfunded budgets.

The appointed Administrator failed to ensure compliance with the Municipal Finance Management Act (MFMA) and relevant National Treasury regulations, despite this forming part of her Terms of Reference.

Declining Performance and Infrastructure

Municipal management achieved only 15% of its key performance indicators, reflecting an organisation struggling to fulfil its most basic responsibilities.

Although municipal assets are valued at R1.163 billion, only R4.6 million (0.4%) is allocated annually to repairs and maintenance—well below the National Treasury's recommended benchmark of 8%.

The consequences of years of underinvestment are becoming increasingly visible:

Approximately 90% of roads are reported to be in poor condition, according to the 2026/27 Integrated Development Plan (IDP).

The municipal vehicle fleet has largely collapsed.

All six sewage treatment plants scored 0% in the latest Green Drop assessment, while untreated sewage continues to pollute valuable water resources.

Governance and Accountability Failures

The Auditor-General also found that Mafube Local Municipality has repeatedly failed—and continues to fail—to investigate unauthorised, irregular, and fruitless and wasteful expenditure (UIFW), as required by the MFMA.

The report identifies persistent governance failures, including:

Inadequate procurement processes.

Poor contract management.

Widespread non-compliance with legislation.

A lack of accountability and consequence management for squandered public funds.

These shortcomings continue to undermine public confidence and place further strain on the municipality's already fragile financial position.

Looking Ahead

The Mafube Business Forum (MBF) remains deeply concerned about the current state of affairs at Mafube Local Municipality. However, we remain hopeful that the upcoming local government elections will bring the leadership, accountability, and positive change that the people of Mafube both need and deserve.

Meaningful change requires active participation from residents, businesses, and ratepayers who are committed to building a financially stable, accountable, and service-oriented municipality.

Together, we can work towards a better future for Mafube.