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Local Government Capital Expenditure (LGCE) Dataset June 2024

Commentary 4th Quarter 2023/24 (as at June 2024): Weaker performance across all spheres of local governments

Local governments underspent on their capital budgets by R27bn for the 2023/24 financial period, an increase of R7bn compared to the 2022/23 financial year, having spent a cumulative 66 percent of the annual R78.6bn capital budget. Metros underspent by R10bn (an expenditure rate of 71 percent, from 76 percent in 2022/23), local governments by R13bn (an expenditure rate of 62 percent compared to 70 percent) and District Councils by R3.8bn (an expenditure rate of 59 percent, compared to 67 percent). This means expenditure rates weakened across all three spheres of local governments, despite the 9 percent increase in capital budgetary allocations in 2023/24, overall, expenditure ended flat. Metros showed some improvement, but the 6 percent increase in capital expenditure to R24.7bn, is an underperformance against the 13 percent increase in the 2023/24 capital budget. Despite a 2 percent increase in the capital budgets for District Councils, actual expenditure fell by 9 percent to R5.4bn. Aggregated expenditure by other local governments fell by 4 percent (against a 8 percent increase in budgetary allocations), to R21.6bn.

Full details are provided in the Local Government Capital Expenditure Dataset.

 

Introduction

The LGCE Dataset includes capital expenditure for the full 2021/22, 2022/23 and 2023/24 financial periods and is updated quarterly.

• Local government capital expenditure aggregated by province for "infrastructure related items" such as housing, health, roads, energy and water,  is also included for periods 2017/18 - 2023/24, updated quarterly, allowing for a 6 year trend line to monitor actual performance against budgetary allocations.
• An easy to use interactive Dashboard is also included to extract information on a selected municipality including tables and charts. 
• The main objective of the Local Government Capital Expenditure Dataset, is to track local government performance, benchmark performance against other local governments and identify growth opportunities.  The performance of a metro, DC or local government directly impacts investment opportunities and the attractiveness for investors and monitoring performance in terms of capital expenditure is therefore critical to identify longer term growth opportunities.

The following quarterly indicators are currently included for all municipalities:

• Operating Revenue
• Operating Expenditure
• Capital Expenditure Functional
• Capital Expenditure as % of total expenditure
• Capital Expenditure on key focus areas
  • Housing
  • Health
  • Energy Sources
  • Road Transport
  • Water Management
  • Waste Management
  • Waste Water Management
• Employee Related Costs
• Employee Related Costs % of Operating Revenue
• Employee Related Costs % of Operating Expenditure
• Source of Finance for Capital Revenue
  • Internally generated funds (Rands)
  • Internally generated funds as % of total capital revenue
• Surplus/Deficit (Rands)
• Surplus/Deficit % of Total Operating Revenue
• Debtors Age Analysis (Total and exceeding 90 days)
• Creditors Age Analysis (Total and exceeding 90 days)

Information is sourced through various documents released by National Treasury.  Local governments are divided by Metro’s, District Councils and Local Government for all nine provinces including Gauteng, Western Cape, Eastern Cape, Kwazulu Natal, Northern Cape, Limpopo, Mpumalanga, Free State and North West Province.

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