If South Africa’s eight largest cities meet certain targets in transforming delivery of basic services, they could be awarded funding through a new ZAR55 billion grant scheme.

Using a US$1 billion loan from the World Bank and US$2 billion from its own coffers, the South African government will finance grants to the municipalities that meet targets in providing water, sanitation, electricity and solid-waste processing. The initiative is aimed at the municipalities in Johannesburg, Durban, Cape Town, Bloemfontein, Pretoria, East London, Gqeberha and Ekurhuleni.

Moneyweb reports that the Metro Services Trading Programme – an attempt to reverse the decline of city infrastructure – involves a new, ‘targeted performance-based fiscal transfer’ to the municipalities.

According to the World Bank, the  country’s largest municipalities ‘are facing a crisis in the provision of basic services, marked by declining safety, reliability and accessibility’, adding that ‘urgent action is needed to reverse the collapse of urban services’.

The bank said the programme will comprise grant reforms and ‘conditional financial incentives that encourage municipalities to aggressively target the challenges affecting service delivery’.

The grants are in addition to US$6 billion sourced from revenue collected by the metro municipalities and their borrowing.

1 April 2025
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