The impact of population growth on municipal revenue: Implications for South African municipalities

Abstract

ABSTRACT One of the biggest challenges to South African municipalities is to generate sufficient revenue to ensure that the needs of a growing population are met. The impact of population growth in terms of natural increase and net migration over time on municipal revenue generation is unknown. The assumption is that municipalities that experience rapid population growth do not receive a comparable change in revenue that would allow delivery of basic services. The aim of this research is to determine the relationship between population growth and municipal revenue. This will be achieved by analysing (1) national municipal population, household growth trends between 2001 and 2016 and its relationship to municipal revenue; and (2) analysing municipal ability to generate ‘own income’ and its relationship to indigent households in six municipalities in the Western Cape. The research found that overall municipal revenue increases at a substantially higher rate than population and indigent households.