City managers and chief financial officers in South Africa’s metros are earning millions in salaries, bonuses and car allowances each year — with total packages rivalling the private sector — as residents watch cities crumble before their eyes.
Despite their impressive financial skills and qualifications, top metro managers are presiding over declining audit outcomes, as political interference drives the appointment of party-aligned officials and the division of resources to benefit coalition partners and keep them in power.
At least 16 top executives across the eight metros share more than R44m, even though only the City of Cape Town achieved a clean audit, according to auditor-general Tsakani Maluleke’s latest report on the metros’ 2023/24 financial statements.
Eye-watering details of the salaries and perks are likely to enrage residents and ratepayers navigating pothole-ridden roads, broken traffic lights and long water and electricity outages in spite of rocketing utility bills.
The packages have become even more controversial as urban blight takes centre stage in the run-up to the local government elections. Most visibly, the DA’s Helen Zille moved from Cape Town to Joburg to run as mayor and is attracting social media attention by “swimming” in potholes and embarrassing the ANC-led coalition.
There has also been an overwhelming public response to a report in the Sunday Times last week detailing the multimillion-rand packages enjoyed by heads of municipal entities in Joburg. Heads of 10 of the 13 entities in Joburg are paid above the R3.39m annual upper limit set in the Government Gazette, which publishes local-government salary guidelines.
Their pay has risen by about 26% since 2022, well above inflation and the 3.3% public-sector guidance.
By comparison, President Cyril Ramaphosa is paid just under R3.5m after a recent 3.8% salary hike.
The biggest winners are the city managers for Cape Town and Ekurhuleni, Lungelo Mbandazayo, and Kagiso Lerutla, who both get R4.8m a year but only Mbandazayo obtained a clean audit.
Lerutla’s pay package comprises basic pay of R3.5m, pension and medical benefits to the tune of R590,000, a car allowance of R250,000, and a performance bonus provision of R490,000 a year, among other benefits.
Cape Town’s Mbandazayo’s R4.8m package comprises pension and medical benefits of R436,000, with a bonus provision of R360,000 a year.
eThekwini’s Musa Mbhele is the third-highest paid city manager, whose R3.8m package comprises a R794,000 car allowance and a R383,000 performance bonus.
Mbhele and his CFO Dr Sandile Mguni, who earns R3.7m a per year, including a car allowance of R889 000, did not get a clean audit, obtaining an unqualified audit with findings.
In fact, in the period under review, none of the metros got a clean audit, with the exception of Cape Town. This means that at least 16 of the metros officials that shared R44m in pay during 2023/24, only those from Cape Town kept clean financial records.
In her consolidated report on the audit of municipalities for 2023/24, Maluleke painted a grim picture of the financial state of the metros, with the exception of Cape Town, describing them as “concerning”.
“The cities of Tshwane and Mangaung have both disclosed significant doubt about their ability to continue operating fully as a going concern for four years or more. We also assessed their financial position as requiring immediate attention because of the material unfavourable financial indicators,” she said.
She flagged Mangaung for spending 81% of revenue collection, or R2bn a year, on employee-related costs, risking the capital budget to deliver basic services.
Johann Mettler, the city manager of Tshwane, which got a qualified audit opinion, earns R3.3m, while his counterpart from the Nelson Mandela Bay Metro also earned a little over R3m, also with a qualified opinion.
The city manager of East London’s Buffalo City metro, Mxolisi Yawa, which also got a qualified audit opinion, pocketed R2.5m, including allowances worth R650,000.
In the City of Johannesburg, the country’s wealthiest metro with a budget of R87bn, the municipal manager gets R3.3m and the CFO R2.5m. Despite its service delivery controversies, Johannesburg obtained a clean audit.
While the bumper salaries will raise eyebrows, one expert believes they are justified and that managers controlling multibillion-rand budgets and thousands of staff face a greater challenge than private-sector counterparts.
Dr Harlan Cloete, a research specialist in human resources management in local government at the University of the Free State, said the salaries were not excessive and were comparable to the private sector, given the budgets and number of staff.
The cities of Cape Town, Ekurhuleni and eThekwini have annual budgets of R58bn, R54bn, and R64bn, respectively. Combined, they employ more than 86,000 people.
“Sometimes the criticism is that we pay people too much in local government, but if you compare that with the private sector, it is not really the case. Local government and public leadership are extremely more complex and more demanding than private sector leadership,” said Cloete.
“The private sector themselves earn a lot more. I think it is comparable given the budgets and their responsibilities.”
However, Cloete pointed out that performance management at the municipal level, including the metros, was weak.
“Performance management is not properly implemented in municipalities,” said Cloete.
“Look, as a point of departure, municipalities in themselves are complex institutions to run, and they run billions of rand in budget. The problems in these metros are skills mismatch, weak performance management and limited consequences for poor performance.
“In many municipalities there is simply no commitment to do what the AG advises. So people are shielded from consequence management because they enjoy the protection of politicians.”
The AG also pointed out that the audit outcomes of the metros have been regressing since 2021.
“Metros typically have better capacity and bigger budgets than other municipalities and can more easily attract suitably skilled and competent professionals. Therefore, one would expect them to have positive audit outcomes and set an example for other municipalities. However, the overall audit outcomes of metros have continued to regress since 2020-21, while the outcomes of their entities have improved only slightly,” she said.
Co-operative governance and traditional affairs minister Velenkosini Hlabisa believes that for a municipality to function optimally, it has to hire top officials and compensate them accordingly.
In an interview with the Sunday Times, Hlabisa warned that poor salary levels will tempt officials to stick their fingers into taxpayer coffers.
“If you want competent people, you must remunerate them sufficiently. If you give them peanuts, they will steal the money for service delivery because you are not giving them enough.
Recently, Maluleke reportedly echoed Hlabisa’s sentiments, saying that running a metro municipality is more complex than running some profit-orientated companies listed on the stock exchange.
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