Search Climate Insights Directory

The report argues that South African municipalities are in a state of financial distress because the fiscal framework designed in the 1998 White Paper overestimated the ability of local governments to fund their operating expenditures through property rates and service charges. While the framework assumed 73% of operating costs could be covered by own revenue, the authors estimate the actual figure is likely less than 50%. This gap forces tariff increases that erode the 'social wage'—the state's strategy of providing affordable basic services to reduce poverty. The paper notes that good governance alone cannot solve this structural deficit, as even municipalities with clean audits often end the year in deficit. It further highlights that Eskom's direct supply of electricity to many households removes a key credit control tool for municipalities, hindering the collection of rates and taxes. The authors conclude that the system is fundamentally unsound and requires a complete redesign based on empirical data regarding service costs and household affordability.

The report finds that while armed conflict fatalities in Africa are generally declining, the continent remains vulnerable due to structural drivers including poverty, youth bulges, and poor governance. It notes a shift from rural armed conflict toward urban political protests and riots. The analysis identifies a core group of countries at the highest risk of armed conflict and argues that inclusive economic development and improved governance are the only long-term solutions for stability.