The best-run province in South Africa – and it isn’t even close – BusinessTech

The Western Cape has the best-run finances in the country by far, with its unauthorised, irregular, fruitless and wasteful expenditure (UIFWE) balances 25 times lower than the country’s worst offender, North West.

Unauthorised, irregular, fruitless and wasteful expenditure at South African municipalities increased in 2025, with over R268 billion unaccounted for in the latest data.

This is one of the alarming findings in the National Treasury’s Municipal Finance Management Act (MFMA) compliance report for 2024/25.

The report assesses municipalities’ compliance with the Municipal Finance Management Act (MFMA) in South Africa.

It looks at municipal performance in areas such as asset management, cost containment, UIFWE, consequence management, supply chain management, audits, and the use of consultants, among others.

While the Treasury noted “incremental progress” in some areas, such as financial reporting and cost containment, it flagged deep-seated weaknesses in others.

Of particular concern are persistent issues in leadership stability, consequence management and implementation discipline, it said.

Worryingly, municipalities are not making progress with UIFWE, where the national balance of this spending has increased from R264.10 billion in 2023/2024 to R268.13 billion in 2024/2025.

Treasury said this has been driven by systemic failures in internal controls and weak consequence management.

Irregular expenditure remains the most significant contributor to the UIFWE balances, it said, reflecting widespread non-compliance with procurement and financial regulations.

“Many municipalities lack robust systems to ensure the timely implementation of council resolutions on the recoverability or write-off of UIFWE,” it added.

More concerning, however, is that the National Treasury observed high levels of write-offs taking place, rather than attempts to recover money.

This, it said, indicated municipalities’ failure to hold individuals accountable for financial misconduct.

The department noted that allegations of financial misconduct declined from 1,116 reported in 2023/24 to 614 in 2024/25.

Financial misconduct cases investigated fell from 601 in 2023/24 to 544 in 2024/25, and officials against whom disciplinary action was taken dropped from 255 in 2023/24 to 236 in 2024/25.

While these regressions may point to fewer such cases, they could also reflect delays in instituting or proceeding with disciplinary cases.

They could also reflect weak policy enforcement or poor understanding of disciplinary processes, Treasury said.

Western Cape is the best by far

Looking at the UIFWE balances across the country, the North West Province is the worst offender, racking up a total of R71.14 billion in 2025, up from R67 billion the year before.

This is 25 times larger than the Western Cape, which has the lowest UIFWE spend at R2.8 billion—a reduction from R3.5 billion the year before.

The Western Cape UIFWE balance is even 3 times lower than that of its closest ‘competitor’, Limpopo, cementing its position as the province with the best-run municipal finances.

Other reductions in UIFWE were recorded in KwaZulu-Natal, Limpopo, the Northern Cape, and a slight drop in Mpumalanga.

All other provinces saw UIFWE increase, with the biggest jump in the North West, which has maintained the top position for some time.

However, even where provinces saw a drop in UIFWE, Treasury slammed the high balances, remarking that they were much larger than municipal capacity and reflected long-term issues and persistent weaknesses.

Treasury said that, although improvements were recorded in some provinces, these gains were outweighed by significant increases in provinces with large existing UIFWE balances.

“The continued growth in the national UIFWE balance highlights structural weaknesses in governance, financial oversight and accountability mechanisms,” it said.

Of particular concern was the continued escalation in the North West, which Treasury said reflects deep-rooted governance failures.

These include prolonged vacancies in key financial positions, weak supply chain management controls and ineffective consequence management.

Conversely, referring to the Western Cape, it said, “the sustained reduction reflects relatively mature internal control systems, stronger preventative measures and more consistent oversight during 2024/25.”

“The trend demonstrates the impact of stable governance and disciplined financial management.”

The table below outlines the unauthorised, irregular, fruitless and wasteful expenditure totals across the provinces: