When you look at how South African municipalities handle their money, the differences are stark. Some struggle to keep the lights on, while others manage to build infrastructure, pay their bills on time, and still have money left over. The question is not whether good financial management matters—obviously it does—but rather what these high-performing municipalities are doing differently.
The Auditor-General’s audit outcomes for the 2023/24 financial year, alongside assessments from Ratings Afrika’s Municipal Financial Sustainability Index, paint a picture of which councils are getting it right. What stands out is not just that these municipalities achieve clean audits, but that they maintain operational surpluses, spend their capital grants fully, and keep debt under control. These are not abstract achievements. They translate into roads that do not fall apart after one rainy season, water that actually flows when you turn on the tap, and electricity connections that do not take months to complete.
1. West Coast District Municipality (Western Cape)
Fourteen clean audits in a row. That is the kind of record that makes accountants weep with joy. West Coast District Municipality sits at the top of Ratings Afrika’s 2025 index, and when you dig into the numbers, the reasons become clear. This is not a wealthy urban center with massive commercial tax bases. It is a district serving rural communities, yet it manages to fully utilize capital grants and maintain operating surplaces year after year.
The municipality’s approach centers on getting money in the door efficiently and spending it where it counts—water infrastructure, sanitation systems, and basic services that rural areas desperately need. Leadership stability plays a role here. When you do not have a new municipal manager every eighteen months, institutional knowledge builds up. Internal controls become second nature rather than boxes to tick during audit season.
2. Saldanha Bay Local Municipality (Western Cape)
Saldanha Bay scored 74 out of 100 in the 2025 index, tying for the top spot among local municipalities. Located on the coast, it benefits from tourism and growing renewable energy investments, but plenty of coastal towns have those advantages without achieving similar financial results. The difference is execution.
Last year, Saldanha Bay spent 100 percent of its infrastructure grants. Not 97 percent. Not “most of it.” Every cent went into harbor upgrades, housing projects, and community facilities. Irregular expenditure sits at zero, which suggests procurement processes that actually work. Debt levels remain low, and when residents report service issues, response times are reasonable. This is the kind of practical competence that rarely makes headlines but changes daily life.
3. Swartland Local Municipality (Western Cape)
Agricultural areas face unique financial pressures—revenue fluctuates with harvest cycles, and infrastructure needs sprawl across vast distances. Swartland has maintained an unqualified audit without findings for more than a decade, which in municipal finance terms is roughly equivalent to pitching a perfect game in baseball, repeatedly.
The municipality’s debt-to-revenue ratio hovers below 20 percent, giving it room to offer property tax rebates without compromising service delivery. Digital expenditure tracking tools have cut waste significantly. When you can see in real time where every rand goes, it becomes much harder for inefficiency to hide. Irrigation systems and waste management plants get funded because the money is actually there, not trapped in bureaucratic limbo or lost to irregular spending.
4. Midvaal Local Municipality (Gauteng)
Gauteng does not dominate this list, which makes Midvaal’s performance more striking. Twelve consecutive clean audits, five awards at the 2024 SALGA Municipal Audit Awards, and zero outstanding debt to Eskom or Rand Water. That last point deserves emphasis. Many municipalities drown under utility debt, leading to service cutoffs and endless negotiation cycles. Midvaal simply pays its bills.
Revenue enhancement through efficient billing systems generates consistent surpluses. Those surpluses fund road networks that logistics companies notice, and public safety initiatives that make industrial areas more attractive to investors. This creates a reinforcing cycle—better infrastructure brings investment, investment grows the tax base, and the expanded tax base funds more infrastructure. Simple in theory, rare in practice.
5. Mossel Bay Local Municipality (Western Cape)
Offshore gas operations give Mossel Bay a revenue advantage, but the municipality could easily squander that advantage through poor management. Instead, it channels surpluses into tourism infrastructure—beachfront improvements, environmental projects, and conservation efforts that protect the assets bringing visitors in the first place.
Clean audit status since 2018 reflects compliance that goes beyond filling out forms correctly. Asset registers stay current, procurement follows transparent processes, and the Municipal Finance Management Act becomes operational reality rather than theoretical framework. Electricity provision remains reliable, which in South Africa’s current climate qualifies as a significant achievement.
6. Swellendam Local Municipality (Western Cape)
Rural municipalities often struggle with limited tax bases and seasonal revenue swings. Swellendam, with a 2025 index score of 73, shows how discipline overcomes disadvantage. Full expenditure on conditional grants funds heritage preservation and rural electrification—unglamorous projects that nevertheless determine whether communities thrive or stagnate.
Liquidity management here deserves attention. Maintaining cash reserves at 150 days might seem excessive until you remember that wine and tourism revenues can vanish during economic downturns. Those reserves allow the municipality to maintain services when private sector activity slows. Community engagement forums ensure budgets reflect actual needs—youth skills programs, agricultural support—rather than what administrators assume people need.
7. Hessequa Local Municipality (Western Cape)
Eight years of clean audits, an index score of 72, and irregular expenditure below 1 percent of budget. Hessequa has turned debt recovery from an aspiration into standard operating procedure, and supply chain reforms from a buzzword into functional reality. Water scarcity drives investment in desalination plants—expensive infrastructure that requires long-term financial planning and discipline.
The integration of environmental sustainability into financial planning goes beyond greenwashing. Eco-tourism levies generate conservation funding without hiking property taxes, showing that environmental and fiscal goals can align when managed properly. Education partnerships expand service delivery without proportionally expanding costs, another example of strategic resource deployment.
8. Cape Winelands District Municipality (Western Cape)
Eleven consecutive clean audits might start to sound routine at this point in the list, but that is precisely the point—excellence should be routine. Cape Winelands manages vineyard economies and export logistics, keeping tariffs competitive while expanding broadband access. Oversight committees enforce procurement protocols that have reduced fruitless spending by 40 percent over five years.
That 40 percent reduction frees substantial resources for cross-municipal collaborations. Shared fire services, for instance, provide better coverage at lower per-capita costs than separate municipal departments. This type of regional thinking—pooling resources for efficiency—remains uncommon in South African local government, which makes Cape Winelands’s approach noteworthy.
9. City of uMhlathuze Local Municipality (KwaZulu-Natal)
Finally, something besides another Western Cape municipality. uMhlathuze ranked in the top three secondary cities according to the 2024 Governance Performance Index, with consistent improvement in audit outcomes. Industrial port revenues provide the financial base, but coastal industrial cities elsewhere fail to convert economic activity into fiscal health.
The municipality achieved unqualified audit status without findings in 2023/24 while simultaneously halving its Eskom debt through negotiated payment plans. This combination—improving compliance while reducing legacy debt—requires careful prioritization. Harbor expansions and skills academies get funded, creating infrastructure and human capital that attract further investment. Manufacturing dominance gives way to economic diversification, which strengthens resilience.
10. Namakwa District Municipality (Northern Cape)
Vast arid landscapes, sparse populations, and mining-dependent revenues—Namakwa operates under constraints that would excuse mediocrity. Instead, it earned national recognition at the 2025 National Good Governance Awards for clean audit outcomes. Mining royalties get managed precisely, funding solar farms and rural clinics that would otherwise never materialize.
Liquidity ratios exceed national averages, creating buffer funds for drought relief. When water runs out, having cash reserves means emergency responses happen in days rather than months. Ethical procurement practices and staff training curb irregularities, demonstrating that even resource-scarce regions can achieve sustainability when management prioritizes competence over patronage.
Conclusion
These ten councils manage over 50 billion rand collectively, and waste remains minimal. Clean audits correlate directly with service delivery—this is not theoretical. Roads stay maintained, power stays on, and water reaches taps. Common elements appear across all ten: stable leadership teams, skilled financial officers who understand both accounting and municipal operations, and community involvement that provides oversight beyond formal audit processes.
Challenges persist, naturally. National grant delays disrupt planning cycles regardless of how well municipalities manage their own resources. Economic volatility hits everyone—tourism collapses during global downturns, commodity prices swing unpredictably, and national electricity crises strain local budgets. Even the strongest performers on this list face these pressures.
Yet their performance during difficult times reveals capacity that weaker municipalities lack. When revenue drops, fiscally healthy municipalities adjust without catastrophic service cuts. When infrastructure fails, they have reserves to fund emergency repairs. When opportunities emerge—new industries, development projects—they can move quickly because their financial houses are already in order.
The geographic concentration raises questions. Western Cape municipalities occupy seven of ten spots. Does this reflect provincial support systems, political stability, or economic advantages? Probably all three, but the presence of Midvaal, uMhlathuze, and Namakwa proves that excellence is not confined to one province. Different contexts require different strategies, but fundamental principles—transparent procurement, debt discipline, full grant utilization, stakeholder engagement—apply everywhere.
Scaling these practices nationally requires more than sharing best practices at conferences. SALGA forums help, but translating knowledge into action demands political will and technical capacity. Municipalities struggle for different reasons—some lack skills, others face political interference, many deal with inherited problems that compound over decades. One-size-fits-all solutions miss these nuances.