To achieve their constitutional objectives, municipalities must generate income to fund a significant portion of their budget and to supplement the grants and funding received from the government.
However, when discussions around the municipality’s mandate are directed towards optimal revenue performance and a healthy surplus, the conversations take a muted turn.
Revenue is central to municipalities meeting their constitutional responsibilities; however, many municipalities still lag.
According to the Ntiyiso 2019/20 Municipal Revenue Maturity Benchmark Report (see below), 32% of participating municipalities have fewer than four own-sources revenue, while only 16% of them have more than 18 own-sources revenue.
However, the survey suggests that municipalities remain modest in their choice of new or additional revenue sources.
In fact, the Ntiyiso research reports that municipalities are currently considering several traditional revenue sources including rental of facilities, fines and issuing of drivers’ licenses.
These revenue sources are in line with current prescripts and legislation, which suggests that for municipalities to identify new and old revenue sources, National Treasury and other national government bodies would have to initiate the innovation debate.
Read the Ntiyiso Municipal Revenue Maturity Benchmark Report 2019/20 to unpack the insights and top findings from this research paper.
Miyelani Holeni, the group chief advisor at Ntiyiso Consulting, explained: “Our maturity model is an instrument through which municipalities can evaluate their level of maturity against peers within the same category while identifying potential revenue growth opportunities.”
He continued: “Determining the level of revenue maturity is critical as it signifies the degree to which the municipality can weave together legislative stipulations, implement strategies, craft relevant policies, automate processes, attract skilled staff, and deploy expertise from both internal and external environments.”
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