MUNICIPAL DYSFUNCTION: Nelson Mandela Bay residents face steep rate increases amid service delivery failures

Ratepayers in Nelson Mandela Bay brace for steep increases as the council debates a newly proposed budget, raising alarm over service delivery failures and financial difficulties.

Enter your email below and we'll send you a one-time pin to log in.

The Nelson Mandela Bay metro’s initial budget, presented to the National Treasury on 18 May, was unfunded and sent back for the metro to cut costs, including international travel and the Assistance to the Poor programme.

With dwindling collection rates, sky-high electricity and water losses and pressure to increase the price of basic services, the budget report makes for grim reading.

The council will debate the revised budget on Thursday, June 4. Once approved, the new tariffs for water, electricity, and other services will take effect on 1 July. Current projections are that residents will face steep rate increases.

The budget was delayed because the Treasury rejected the initial draft as unfunded. Under the Municipal Finance Management Act (MFMA), budgets must be approved 30 days before the new financial year begins and must rely strictly on realistic revenue projections, cash reserves, or capital project loans. Because the original draft failed to meet these funding requirements, it could not be recommended to the council for approval.

According to the budget report, the Treasury held a meeting “to assess the funding status of the noted budget (i.e. 2026/27 to 2028/29). When National Treasury applied their systematic tool in gauging the funding position of the budget, it became apparent that the budget was unfunded and therefore could not be placed before the council to recommend its approval.

“They urged that this matter be re-looked and reversed as the municipality is experiencing financial strain. One of the most critical areas that has caused this dilemma is the status of the average collection rate.”

The Treasury also recommended that the council limit its international travel expenditure and revise its overtime policy.

The budget that has now been presented to the council is funded, but was presented out of time.

Metro spokesperson Sithembiso Soyaya said the municipality was “committed” to complying fully with legal requirements and Treasury processes.

“It is important to clarify that the municipal council considered and noted the proposed 2026/27 Medium-Term Revenue and Expenditure Framework Budget and Integrated Development Plan at a special council meeting held on 29 May 2026, in line with the legislative requirements governing the municipal budget process.”

He said that while the deadli