The budget that must balance
An unfunded budget is a promise a municipality has made to itself that it cannot pay for. It approves spending its revenue cannot cover, and the gap becomes unpaid suppliers, unfilled posts, deferred maintenance and, eventually, an audit qualification. The ANC’s 2026 manifesto gives itself two years to end the practice in every ANC-led municipality.
This is the sixth piece in The People’s Register’s Masakhe series, after the 100-days timeline, the 8% maintenance rule, the one-million opportunities and the community safety forums. Action Four is where the others meet the money: no maintenance rule survives an unfunded budget, and no jobs promise outlasts an unpaid supplier.
The action area’s commitments are the most numerical in the manifesto, and they arrive alongside the Bay’s own qualified 2024/25 audit and National Treasury’s unfunded-budget assessment, making this the piece where the series’ numbers and the metro’s numbers run closest together.
What Action Four promises
The action area’s measurable commitments:
| Commitment | Target |
|---|---|
| Unfunded budgets eliminated | Within the first two years of the new term |
| Clean or unqualified audits | At least 50% of municipalities by 2031 |
| Eskom and water-board debt | Reduced by at least 30% by 2031 |
| Municipal workers and suppliers | Paid on time, every time, in every municipality |
| Billing and revenue systems | Audited in every municipality within the first year |
| Tariff schedule | Published within 14 days of adoption, readable, with an online calculator |
| Free Basic Water and Electricity | Protected and expanded for qualifying households |
Why unfunded budgets matter
The manifesto names the problem directly. Some municipalities, it states, pass unfunded budgets, underinvest in maintenance, see projects incomplete due to corruption, and fail to achieve clean audits. The document’s own accounting of the 2021 term records 516 material irregularities identified by the Auditor-General in 2024/25, with R1.69 billion in financial losses recovered or in recovery.
An unfunded budget is not a technical accounting issue. It is a governance decision to approve spending the municipality cannot afford, and its consequences reach every resident: the supplier who stops delivering because invoices go unpaid, the maintenance team that cannot be hired because the post is frozen, the infrastructure that decays because the budget line was never funded in the first place.
The manifesto’s two-year deadline is the discipline. A budget that must balance, by a date certain, forces the trade-offs into the open: either the revenue is raised, the spending is cut, or the gap is named. None of those outcomes is comfortable, but all are more honest than the alternative.
Austerity, global instability and the working class
The context for Action Four is not only municipal mismanagement. It is a decade of global instability, fiscal consolidation and rising costs that has landed hardest on the working class and the poor. The ANC governs in that reality, and the manifesto’s financial commitments are a direct response to it.
The numbers are stark. Unemployment has reached 41.9% on the broad measure. More than two-thirds of South Africans live in poverty. Public hospitals, schools and municipalities have absorbed years of budget cuts. Main budget non-interest expenditure has been reduced in real terms, shrinking the state’s ability to meet basic social needs at precisely the moment those needs have grown.
The manifesto’s answer is not to retreat from service delivery but to fund it differently. The insourcing of municipal workers, ending the tenderpreneur economy that has exploited contract workers while draining municipal budgets, is a financial commitment and a class commitment at the same time. The protection and expansion of Free Basic Water and Free Basic Electricity, at a time when the social wage is under pressure, is a commitment to the households that depend on it most. The insourcing commitment alone redirects millions from contractor profits to worker wages in every ANC-led municipality that implements it.
The grandmother in the queue
The manifesto’s most quietly powerful passage is about an elderly woman. “A grandmother entitled to free basic water must find the municipal offices, produce documents, queue, and do it again next year, while the state already knows precisely who she is, because it pays her grant every month. The entitlement exists and the money is appropriated. What stands between them is a form.”
The commitment that follows is structural. Every household receiving an old-age, disability, child support, care dependency or war veterans’ grant, every child-headed household, and every household registered for the Social Relief of Distress grant is automatically deemed indigent and enrolled for free basic water, electricity, sanitation and refuse removal. No application. No queue. Delivered through a data-sharing agreement with SASSA.
The scale is almost 30 million grant recipients, roughly half of South Africa’s population. The indigent register becomes a live digital register linked to the valuation roll and to SASSA, not a paper list retyped each year. Enrolment does not expire after six months. For older persons specifically, the manifesto commits to a programme on the annual calendar of every community hall, and to municipal facilities, public spaces and pedestrian routes that are safe and accessible.
Batho Pele and the people-centred budget
The action area’s title carries a principle: people-centred municipal finances. The manifesto’s instruments give it substance. The readable tariff schedule with an online calculator is a Batho Pele commitment, putting the resident first by making the bill understandable. The two-day complaint acknowledgement is a service standard with a date. The indigent register that enrols automatically is a system designed around the resident, not the filing cabinet.
Batho Pele, the people-first framework that has guided South African public service since 1997, is not named in the manifesto. Its principles are embedded throughout: consultation, service standards, access, courtesy, information, openness and transparency, and redress. Each is given a mechanism. Each is given a date. That is what distinguishes a manifesto commitment from a value statement.
The gender-responsive budgeting commitment extends the same principle. Budgets that account for the different ways men and women experience municipal services, and that direct resources accordingly, are budgets that put people first in practice rather than in preface.
The audit target, and what it asks
The commitment to at least 50% of municipalities achieving clean or unqualified audits by 2031 is the action area’s most consequential long-term target. It converts audit outcomes, which residents rarely read, into a political promise with a number and a date.
Nelson Mandela Bay’s qualified 2024/25 audit sits inside this target’s frame. A qualified opinion means the auditor found material misstatements or insufficient evidence in the financial statements. The path from qualified to unqualified is specific: accurate financial records, compliance with the Municipal Finance Management Act, and consequence management for irregularities. Each is a municipal function, and each is what the manifesto commits.
The Auditor-General’s reports are public documents. When the 2025/26 audit cycle reports, the number will be checkable against the manifesto’s own 50% target, and this publication will check it.
The tariff schedule you can read
The action area’s most quietly radical commitment may be its simplest: a tariff schedule any resident can read and compute, published within 14 days of adoption, with an online calculator.
Municipal tariff schedules are, in most municipalities, close to unreadable. They are structured for auditors and Treasury, not for the household trying to understand why the water bill increased. The manifesto’s commitment makes the tariff a public-facing document, with a tool that lets a resident calculate what a change means for their own account. For a metro with an indigent population that depends on the free basic allocation, the difference between a readable tariff and an unreadable one is not cosmetic.
The Bay’s test
Nelson Mandela Bay’s financial record is the terrain this action area was written for. The metro’s 2024/25 audit was qualified. Its budget has been assessed by National Treasury as unfunded. Its Eskom and water-board debt sits inside a national municipal debt crisis the manifesto targets for 30% reduction.
The first test is the budget itself. When the new council passes its first budget, does it balance? Is the unfunded gap named and costed, or carried forward in silence? The second is the billing audit, due within the first year. The third is the tariff schedule: is it published within 14 days, and can a resident read it?
Each is a document with a date, and each will exist or not. This publication will ask for all three.
Sources and further reading
This explainer is based on the ANC’s 2026 Local Government Elections Manifesto, Masakhe: Let Us Build, Action Four (pages 37 to 41), on this desk’s commitment-by-commitment review of the document, and on Auditor-General and National Treasury records previously reported for Nelson Mandela Bay.
- Download the manifesto: Masakhe, Let Us Build (PDF, 65 pages)
- The People’s Register: The ANC’s 8% Municipal Maintenance Promise
- The People’s Register: What Masakhe’s First 100 Days Will Look Like in Your Ward
Download the Masakhe manifesto
Read the ANC’s 2026 Local Government Elections Manifesto in full, 65 pages as launched at Riverside Park in Diepsloot on 23 August 2026. Every commitment, every target, every date.