AMATHOLE- The Amathole District Municipality (ADM) has adopted its first fully funded budget in more than seven years, marking what municipal leaders describe as a major milestone in the district’s financial recovery and efforts to restore public confidence.
The budget, approved during a virtual ordinary council meeting on Thursday provides for spending of R2.81 billion in the 2026/27 financial year and is accompanied by the municipality’s final Integrated Development Plan (IDP) and a range of reviewed institutional policies.
The approval comes after years of financial challenges that saw the municipality operating on unfunded budgets, enduring a Section 139 constitutional intervention in 2021 and receiving a string of adverse and disclaimer audit outcomes.
A qualified audit opinion achieved during the 2024/25 financial year signalled the beginning of a turnaround, with the funded budget now seen as another significant step towards stability.
ADM Executive Mayor Cllr. Anele Ntsangani said the municipality’s progress was the result of sustained efforts to improve governance and financial management.
“This budget is proof that sustained institutional effort yields results. For the first time in over seven years, we are presenting our communities with a funded budget one that allows us to plan with certainty, deliver with purpose and account with integrity,” Ntsangani said.
He added that residents had endured the consequences of financial instability for too long and that the municipality was committed to rebuilding a stronger foundation for service delivery.
In addition the municipality’s operating revenue for the year is projected at R2.116 billion, while capital revenue amounts to R692.9 million.
Municipal officials say the budget has been structured to achieve a zero deficit while maintaining strict expenditure controls and implementing measures to improve revenue collection.
Water and sanitation remain the municipality’s top priorities, reflecting its role as both a Water Services Authority and Water Services Provider.
Among the key allocations is R110 million from the Water Services Infrastructure Grant (WSIG), representing a 10.4% increase aimed at expanding access to clean water and sanitation services.
A further R518.5 million has been allocated through the Municipal Infrastructure Grant (MIG) for infrastructure projects across the district’s six local municipalities.
The municipality confirmed that qualifying indigent households will continue receiving six kilolitres of free basic water each month.Furthmore, to support financial sustainability, council approved a 6% tariff increase across water and other municipal services.
Officials said the adjustment seeks to balance affordability for residents with the need to move towards cost-reflective service charges.
Provincial Treasury has reportedly endorsed the funded status of the budget, citing improvements in revenue collection and progress in addressing historical debt linked to the former Amatola Water entity. However, Treasury cautioned that maintaining spending discipline during implementation would be critical to preserving the municipality’s financial position.
ADM has also committed to strengthening debt collection measures, reviewing its valuation roll to ensure service charges accurately reflect property usage and implementing both its Financial Recovery Plan and Budget Funding Plan.
In a move aimed at supporting local economic development, council approved the Medium-Term Revenue and Expenditure Framework budget of ASPIRE, the district’s development agency.
The agency will receive R15 million from the municipality as part of its R18.83 million budget allocation.Council also noted the appointment of Nkosi Sithembele Albert Tyali as a participating traditional leader and approved a broad package of revised policies covering governance, corporate services, community services, finance and infrastructure development.
Municipal leaders believe the adoption of the funded budget signals a turning point for the district and lays the groundwork for improved service delivery, stronger governance and long-term financial sustainability.
Photograph: ADM/Supplied
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