This policy brief undertakes an analysis of municipal revenues over a 12-year period, covering two major recessions (2008 global financial crisis and the Covid-19 pandemic), its aftermath and a period of constrained economic growth in the country. This period was large recessions, followed by small periods of economic recovery and a general struggle for the economy to reach sustained and acceptable levels of economic growth. The policy brief provides simple trends in key municipal revenue instruments over this period to ascertain potential impacts of depressed economic activity on municipal revenue collection.
Furthermore, the policy brief explores whether there is a systematic change in the nature of intergovernmental fiscal transfers to local government during recessions and/or depressed economic growth. In addition to the constitutional and economic role grants play in South Africa’s intergovernmental fiscal system, it is worth assessing whether expansionary fiscal policy, be it via increased social services or capital expenditures, is implemented via increases in local government grants.