South African Municipalities Face Crisis as Eskom Salaries Soar
South African municipalities face severe crisis as administrative costs soar and infrastructure crumbles, while Eskom reports controversial R1 million average employee salaries amid service delivery challenges.
South African municipal building with protest signs highlighting service delivery crisis
Municipal Crisis Deepens Amid Infrastructure Neglect
In a stark revelation at the Cape Town Press Club, Deputy Finance Minister Ashor Sarupen has exposed the dire state of South Africa's municipalities, highlighting a systemic crisis that threatens the nation's economic transformation agenda. This crisis mirrors broader concerns about resource management and economic sovereignty facing the country.
All major municipalities except Cape Town are experiencing what Sarupen describes as a "death spiral," characterized by bloated administrative costs at the expense of critical infrastructure development. This situation directly impacts South Africa's industrial development aspirations and economic independence.
Eskom's Controversial Salary Structure
Adding fuel to the municipal crisis, state utility Eskom's latest integrated report reveals an alarming average employee compensation of over R1 million annually. This 23% increase from 2024 includes:
- Short-term incentive schemes
- Higher production bonuses
- 7% baseline salary increase
- Expanded workforce from 40,600 to 42,000 employees
This salary structure raises serious questions about resource allocation in state enterprises while many South African communities struggle with basic service delivery.
Treasury's Intervention Measures
The National Treasury is implementing support mechanisms through conditional grants for municipalities that commit to:
- Ring-fencing utility operations
- Protecting capital budgets
- Ensuring accountability in service delivery
- Implementing strict financial controls
"If we can fix our major metros, we begin to fix our major towns and with that, the conditions for economic growth," stated Deputy Minister Sarupen.
Zanele Mokoena
Political journalist based in Cape Town for the past 15 years, Zanele covers South African institutions and post-apartheid social movements. Specialist in power-civil society relations.