The South African Property Owners Association (SAPOA) in partnership with Ratings Afrika and the Banking Association of South Africa (BASA) have launched the SAPOA | Ratings Afrika Municipal Performance Award, the first national accolade to honour municipalities that not only demonstrate basic compliance but true excellence in governance, fiscal discipline, and service delivery.

To be presented during SAPOA’s Annual Convention, the award will recognise local governments that balance their books, safeguard public resources, invest in infrastructure, and create conditions for communities and businesses to thrive.

“In a sector where dysfunction often dominates the headlines, these awards will shine a spotlight on the outliers, the municipalities that prove financial sustainability is possible and that it can be the foundation for economic growth and prosperity,” comments SAPOA’s President and MD of Vukile Property Fund Southern Africa, Itumeleng Mothibeli.

According to Ratings Afrika’s 2024 Municipal Financial Sustainability Index (MFSI®), most South Africa’s 115 largest municipalities are in deep financial distress. Collectively, they recorded R35,3 billion in operating deficits in 2024 – money they didn’t have, spent on services they could not sustainably fund.

Liquidity shortfalls ballooned to R104,9 billion, up a staggering R20 billion from 2023, leaving many municipalities unable to pay service providers like Eskom and water utilities on time.

“It’s a crisis that hits residents and businesses alike. Ageing roads go unrepaired, water treatment plants limp along, and power cuts intensify. In some municipalities, service delivery is collapsing outright, a reality that drives up costs for property owners, undermines investor confidence and chokes economic growth,” adds SAPOA CEO Neil Gopal.

Yet amid the decay, a handful of municipalities stand out as models of fiscal discipline and good governance. They balance their books, collect revenues efficiently and invest consistently in infrastructure, proving that financial sustainability is still possible in South Africa’s municipal sector.

It is this standard of excellence that SAPOA aims to celebrate through the launch of the SAPOA | Ratings Afrika Performance Award.

Judging will be based on Ratings Afrika’s six key financial components, a comprehensive benchmark of fiscal health that measures a municipality’s ability to generate operating surpluses to fund services, maintain sufficient cash reserves to absorb shocks, practice prudent borrowing and repayment, apply disciplined and forward-looking budgeting, keep rates and tariffs affordable and invest consistently in infrastructure to strengthen resilience and sustain long-term service delivery.

“A municipality’s financial health directly affects the property sector’s ability to grow,” says Mothibeli. “When service delivery is reliable and infrastructure is maintained, property values rise, businesses invest, and communities thrive. We want to hold up the municipalities that get this right as examples for the rest of the country.”

For SAPOA, the award is more than industry recognition, it is a rallying point for reform. By showcasing best-performing municipalities on a national stage, the association hopes to foster healthy competition, inspire better governance and highlight the economic benefits of fiscal sustainability.

“We can’t accept that dysfunction is the norm,” says Gopal. “We want to create a culture where municipalities strive for this recognition and where excellence becomes the standard, not the exception.”