Why local government fiscal health must be climate-proofed

AS SOUTH Africa reviews the 1998 White Paper on Local Government, we must confront a climate reality that our municipal systems were never designed to withstand.

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We are facing an increasing frequency and complexity of disasters, driven by climate change, urbanisation, and entrenched socio-economic vulnerabilities.

These disasters are no longer isolated shocks; they are the new baseline. And they are cutting municipal budgets—often with irreversible consequences.

Over the past two decades, South African municipalities have absorbed the cost of increasingly frequent and severe climate-related disasters.

While the Disaster Management Act (DMA) provides a foundational legislative framework, recent events have exposed critical gaps in coordination, early warning systems, and institutional capacity at the local level.

We need to capitalise local government for climate Action

Municipalities financial strain is staggering.

According to the Financial Protection Forum and the World Bank, annual disaster relief costs in South Africa cost an average of R3.7 billion per year, with uninsured losses accounting for 86% of the total, necessitating significant government support.

The annual funding gap is projected to exceed R2.3 billion, compared to the current pre-arranged funding of R1.4 billion.

Municipalities, especially those in vulnerable coastal regions, face a vicious cycle.

Disasters destroy infrastructure, diminish the tax base, and force diversion of funds from planned development to emergency relief.

Compounding the issue, critical infrastructure built to outdated standards is collapsing under the strain of today’s climate. This is not just about emergency responses. These are structural fiscal threats that require structural governance reform.