A report from Statistics SA revealed that there are now 28 municipalities in South Africa that are generating a significant income without relying on the government. These municipalities have been recognized as those that help drive the country’s economy forward.
According to Business Insider SA, a quarter of South African municipalities in the North West are generating over 89 percent of their own income, as revealed by the new study that looks into government dependence in the country.
Among the municipalities that do not depend entirely on the government for income are Lekwa-Teemane, Tswaing, Mahikeng, Mamusa, Ramotshere Moiloa, Rustenberg, Kgetlengrivier, Moqhaka, Mantsopa, Tswelopele, Mohokare, Phumelela, Gamagara, Sakhisizwe, Greater Giyani, and more.
Analysts pointed out that while independent municipalities are helping boost South Africa’s economy, dependent municipalities can’t be blamed entirely for relying on the national government for capital funding and operations assistance since independence also relies heavily on a municipality’s location in the country.
The Free State recorded six independent municipalities while the North West accounted for seven independent governments. The rest garnered records between two to five but most of the autonomous municipalities still came from the North West, home of Sun City, one of the most popular tourist sites in the region.
South African municipalities mostly generate their own income from a number of sectors and activities including fines, property taxes, service charges, and levies on utilities. As of December 2018, the country recorded an average of 28 percent on income that municipalities derive from national government subsidies and grants.
Meanwhile, banks are collaborating with the government to further boost small and medium enterprises (SMEs) in South Africa in a bid to increase the number of independent municipalities in the coming years.
According to BizNiz Africa, Standard Bank signed for a joint venture with Founders Factory Africa in efforts to help grow SMEs in the country. The partnerships aims to help growing businesses have more access to markets and obtain necessary skills to become eligible for funding and support from financial institutions.
“Standard Bank with Founders Factory Africa will be launching and scaling 140 disruptive tech-enabled businesses across the continent within the next five years. It will also work towards enhancing the formal start-up culture in key African cities,” senior manager at Standard Bank’s Moonshots department, Nadia Oshry, said.
Business leaders and national government officials are hoping that SMEs in South African municipalities will help push the economy towards growth by engaging in movements and training that will help business owners acquire knowledge in efficient operations and better service.