South Africa’s municipalities are in a perilous state, and while Cape Town remains one of the country’s better-performing metros, it has regressed and did not receive a clean audit.

Presenting the Auditor-General South Africa’s (AGSA) 2024/25 local government audit report in Parliament on Tuesday, Auditor-General Tsakani Maluleke said the outgoing sixth local government administration had made only limited progress in strengthening governance and improving service delivery.

According to the report, only 39 municipalities, representing 15% of all municipalities, achieved clean audits.

At the same time, 38 municipalities regressed since the 2020/21 financial year, including three metropolitan municipalities.

The report found that the performance of South Africa’s metros continued to decline, with none of the country’s eight metropolitan municipalities achieving a clean audit.

However, Cape Town was among only three metros to receive an unqualified audit opinion, meaning its financial statements were found to be credible. The city was also one of only two metros that did not receive material findings on performance reporting.

Despite this, Cape Town was not exempt from broader governance concerns. Like all metros, it received material findings related to compliance with key legislation.

The report also highlighted some positive developments nationally.

The number of municipalities receiving disclaimed audit opinions – the worst possible audit outcome – declined from 29 in 2020/21 to just eight in 2024/25.

In addition, 61% of municipalities received unqualified audit opinions, while 98% submitted their financial statements on time.

Despite these gains, the financial health of many municipalities remains under pressure.

More than half did not have enough current assets to cover their liabilities, while 72% lacked sufficient cash to pay creditors.

The report also found widespread non-compliance with legislation, with 84% of municipalities receiving material findings on compliance.

Irregular expenditure reached R40.14 billion during the 2024/25 financial year, largely due to failures in procurement and contract management.

Maluleke warned that poor governance, weak accountability and inadequate consequence management continue to undermine local government performance and service delivery.

Key findings on Cape Town:

• The City of Cape Town was one of only three metros that received an unqualified audit opinion, meaning its financial statements were found to be credible.
• Cape Town was one of only two metros that did not receive material findings on performance reporting, indicating stronger systems for measuring and reporting performance.
• However, like all metros, Cape Town still received material findings on compliance with key legislation, particularly around governance and procurement controls.
• The report noted that none of South Africa’s eight metros achieved a clean audit, meaning Cape Town also fell short of the highest audit standard.

Mayor Hill-Lewis responds:

In response to a question about the audit report at a Cape Town Press Club event this week, Cape Town Mayor Geordin Hill-Lewis said he was pleased that the City retained an unqualified audit, expanding on some of the matters that the Auditor-General raised.

He says one of the issues the AG raised relates to contractors who fail to deliver.

“This happens all the time, particularly on smaller construction projects. Some of you may have seen this in your neighbourhoods. A contractor does a poor job, and we terminate the contract.”

He explained that the City then places that company on a red list, preventing it from doing business with us again. Even the directors of that company may not re-tender because they have a history of poor performance.

But he says in practice, what often happens is that red-flagged construction companies then start brand new companies overnight, and they tender again.

“So we began tracing whether directors of new companies had previously been directors of companies that had tendered with the City, failed in their work and been dismissed. The Auditor-General found that approach to be prejudicial to those new companies. My view is that the whole point is to be prejudiced against poor workmanship. That’s exactly the point.”

Hill-Lewis says some of the other findings he does agree with, and the City will need to sharpen procedures and processes. But others he doesn’t agree with.

“For example, you may have a 10-year contract that is proceeding smoothly and delivering exactly what it was intended to deliver. Then, in year eight, the AG identifies an issue with a particular invoice, a sign-off process or a similar compliance matter. In the past, that specific invoice or transaction would be flagged. The newer approach appears to be that the entire contract, from year one to year 10, is flagged. I think most people would agree that even if that is what the strict letter of the law requires, it is not a reasonable way to assess issues of that nature.”

The Mayor says he will be taking up some of these matters with the Auditor-General.

“Nevertheless, I am pleased that, despite those findings, we retained our unqualified audit.”

The demand is growing for the City’s substance abuse prevention programmes. According to the City, its substance abuse prevention programme in Community, Arts and Culture Development was overwhelmed this financial year, due to the demand for its services.

“In the space of nine months this year, more than 5 000 learners participated in the City’s substance abuse prevention interventions.”

The demand grows for the City’s substance abuse prevention programmes

The Mayoral Committee Member for Community Services and Health, Francine Higham, says facilitators of prevention initiatives at schools had planned for 3,500 participants across the metropole in nine months. However, attendance so far this year has reached 5,193.

“If we are serious about making our communities safer, we must invest in prevention interventions,” says Higham.

City sees increased demand for substance abuse prevention programmes

World Drug Day is commemorated on 26 June every year. Higham says the theme for this day in 2026 is to raise awareness about the importance of treating people who use drugs with respect and empathy. At the same time, it is about providing evidence-based, voluntary services for everyone. It’s about offering alternatives to punishment; prioritising prevention; and leading with compassion.

“The City’s efforts are coordinated by its Alcohol and Drug Action Committee.”

World Drug Day is commemorated on 26 June every year

Higham says people cannot ignore the direct link between substance abuse and the violence and crime that plague many communities. She says this is why prevention programmes like these are so important. “They do more than educate young people about the dangers of substance use. They also address issues like bullying, peer pressure, self-worth and making good decisions,” she added.

“Intervention services are led by City Health through its outpatient Matrix® substance abuse treatment programme, while the City’s Safety and Security Directorate is tasked with suppression through its enforcement operations.”

WHERE TO SEEK HELP

The City has a 24-hour Alcohol and Drug Helpline: 0800 HELP 4 U (0800 435 748)

Alternatively, contact the City’s Matrix Clinics at matrix@capetown.gov.za

For general information on the City’s substance abuse programmes, email CTADAC@capetown.gov.za

The substance use prevention unit’s key programmes are:

Driving my future: https://bit.ly/4aSHtQT

Essentially me: https://bit.ly/40ekXvO

Family Strengthening Programmes: https://bit.ly/4szfXOx

The ANC has accused former president Jacob Zuma and his MK Party of fuelling tensions around planned anti-immigration protests, warning that the current climate bears similarities to the unrest that rocked South Africa in July 2021.

Speaking at a post-National Working Committee briefing at Luthuli House on Thursday, ANC secretary-general Fikile Mbalula alleged that political forces were exploiting public frustration over illegal immigration to destabilise the country ahead of the upcoming local government elections.

Mbalula specifically criticised Zuma, saying it was ironic that the former president had aligned himself with calls for undocumented foreigners to leave South Africa despite presiding over the country’s migration challenges during his tenure.

#ANCNWC Mbalula: Jacob Zuma is irresponsible, he is promoting violence with ‘Mabahambe’, he is fuelling violence against fellow Africans. #sabcnews pic.twitter.com/4dw6j4Kyq3

— #LordOfTheMedia (@samkelemaseko) June 25, 2026

“Because what is unfolding on some of our streets is not, at its heart, about immigration at all,” Mbalula said.

“We have seen this architecture before. In July 2021, our country was dragged to the very edge of the abyss by a coordinated assault dressed up as a grievance; an organised attempt to render the country ungovernable and to challenge the authority of the democratic state itself.”

While Zuma has not personally endorsed the March and March movement’s demand that undocumented foreign nationals leave the country by 30 June, the MK Party has confirmed it will participate in demonstrations planned for that day. March and March leaders have repeatedly denied receiving support from the MK Party.

Mbalula drew direct parallels between the current tensions and the riots that followed Zuma’s imprisonment for contempt of court in 2021.

The unrest, which spread across KwaZulu-Natal and Gauteng, claimed more than 350 lives, led to over 5,500 arrests and inflicted an estimated R50 billion in economic losses.

“What we are witnessing now carries the same fingerprints,” Mbalula said.

“Unlawful immigration is being manipulated by new political formations whose real purpose is to manufacture chaos, to collapse the institutions of the state, and to engineer fear and unfair conditions on the very eve of our local government elections.”

The ANC said it supported the enforcement of immigration laws but rejected vigilantism and violence directed at foreign nationals.

Mbalula says the government has stepped up efforts to tackle illegal immigration, with the Department of Home Affairs reporting more than 110,000 deportations this year and the cancellation of about 2,000 fraudulently obtained study visas.

Law enforcement agencies have also arrested more than 40,000 undocumented persons, including over 7,400 in the past month, while 143 people have been detained for allegedly inciting violence against foreign nationals.

Mbalula also condemned what he described as the misuse of traditional Zulu heritage symbols by groups seeking to justify acts of intimidation and violence.

“There are formations in our politics that have embraced an open ethno-nationalism and sought to hijack the proud heritage of the amabutho and the sacred symbols of our people’s history,” he said.

“The regiments of our forebears were raised to defend the nation and its people, not to terrorise the vulnerable, to loot the trader, or to burn the home of the poor.”

He welcomed recent calls by Zulu King Misuzulu kaZwelithini against the abuse of traditional institutions and violence targeting foreign nationals.

Despite its criticism of the protests, the ANC acknowledged that concerns about illegal immigration, access to jobs, housing and public services were legitimate and required government intervention.

“The anxieties of South Africans about work, shelter, dignity, safety and access to services are real and legitimate,” Mbalula said, adding that these concerns must be addressed through lawful enforcement and effective governance.

[WATCH] MIGRATION, COMMUNITY TENSIONS AND THE THREATS AROUND 30 JUNE

Nowhere is the first promise of the Freedom Charter — that South Africa belongs to all who live in it more sorely tested today than on the question of migration. We speak with compassion and with firmness, and… pic.twitter.com/NMOoKQEz0f

— ANC SECRETARY GENERAL | Fikile Mbalula (@MbalulaFikile) June 25, 2026