Ndlambe Municipality’s proposed budget for the 2024/2025 financial year is a shocking display of either malice or incompetence. Both possibilities are deeply concerning.

The budget includes significant increases in rates and service charges, far exceeding the projected inflation rate:

• Municipal Rates: 15% increase on average
• Electricity: 13% increase (NERSA denyied Ndlambe’s request for a 15.7% increase)
• Water: 11% increase for basic/availability fees and usage fees
• Sewage: 11% increase for basic/availability fees and sanitation/pump-outs fees
• Refuse Removal: 12% increase
• Environmental Fee: 9% increase

These increases are particularly egregious given the National Treasury’s directive in MFMA Circular No. 126. The circular emphasizes the importance of balancing affordability for households with the financial sustainability of municipalities. It suggests that tariff increases should generally align with the projected inflation rate.

Ndlambe’s mayor has rightly realized that the municipality has already increased water and electricity prices to a level that suppresses demand. To stabilize revenue, the municipality has thus increased fixed charges for these services. However, the National Treasury’s guidelines require that such increases be offset by reductions in consumption charges to ensure that the overall impact on ratepayers is in line with inflation, and this has not been done. Nor has any justification been provided.

It is unclear how this budget was approved despite review by the Council and PARRA. However, the municipality’s attitude towards ratepayers is evident in the flawed examples of the year-on-year increase in ratepayers bills that were prepared for budget consideration. These errors suggest that the review process was either inadequate or intentionally misleading.

The lack of strong opposition from Ndlambe ratepayers is deeply troubling. Years of poor service may have led to apathy, disillusionment, or simply a lack of awareness. It is essential for ratepayers to recognize that they are being exploited and to organize to resist these unfair increases.

MFMA Circular No. 126

“National Treasury encourages municipalities to maintain tariff increases at levels that reflect an appropriate balance between the affordability to poorer households and other customers while ensuring the financial sustainability of the municipality. The Consumer Price Index (CPI) inflation is forecasted to be within the 4 to 6 per cent target band; therefore, municipalities are required to justify all increases in excess of the projected inflation target for 2024/25 in their budget narratives and pay careful attention to the differential incidence of tariff increases across all consumer groups.”