Determinants of Effective Revenue Management in South African Municipalities: Evidence from Buffalo City Metropolitan Municipality
Keywords:
Local Government, Municipal Finance, Revenue Collection, Regulatory Compliance, Service DeliveryAbstract
The study aims to identify institutional, political and behavioural determinants that shape municipal revenue performance, using Buffalo City Metropolitan Municipality (BCMM) as a case. Extends South African and Global South literature that links fiscal outcomes to governance capacity, political incentives and data integrity. Concurrent mixed-methods design: a survey of 120 municipal officials and 12 semi-structured interviews with finance managers, councillors and revenue practitioners. Persistent weaknesses include outdated billing/ICT, inaccurate debtor profiling and forecasting, inconsistent credit-control enforcement (especially near elections), and fragmented indigent registers that erode trust. These factors interact systemically to depress collection ratios and increase dependence on intergovernmental transfers. Technical fixes alone are insufficient. Improvements require professionalised revenue units, integrated digital platforms, depoliticised enforcement, updated indigent registers and citizen-facing transparency to rebuild compliance. Reframes municipal revenue management as a governance problem rather than a purely technical task and proposes a context-sensitive reform framework for BCMM and similar municipalities.
References
Auditor-General South Africa (AGSA). (2023). Consolidated General Report on the Local Government Audit Outcomes: 2021/22. Pretoria: AGSA. https://www.agsa.co.za.
Bahl, R. W., & Bird, R. M. (2008). Subnational taxes in developing countries: The way forward. Public Budgeting & Finance, 28(4), 1–25.
Bandalouski, K., Kovalyov, M. Y., Pesch, E., & Tarim, S. A. (2018). Revenue management and demand forecasting. European Journal of Operational Research, 269(2), 455–472.
Bird, R. M., & Zolt, E. M. (2008). Technology and taxation in developing countries: From hand to mouse. National Tax Journal, 61(4), 791–821.
Bryman, A. (2016). Social research methods (5th ed.). Oxford University Press.
Buffalo City Metropolitan Municipality. (2023). Integrated Development Plan (IDP) and Adjustment Budget 2023/24. East London: BCMM.
Cloete, F., & Ajam, T. (2011). South African Public Administration and Management. Juta and Company Ltd.
Creswell, J. W., & Plano Clark, V. L. (2018). Designing and conducting mixed methods research (3rd ed.). SAGE Publications.
Daily Dispatch. (2022, April 13). Flood damage puts pressure on BCM’s emergency budget. https://www.dispatchlive.co.za/news/2022-04-13-flood-damage-puts-pressure-on-bcms-emergency-budget.
De Renzio, P. (2013). Assessing and Strengthening the Quality of Public Finance Management Systems: The PEFA Framework. Overseas Development Institute. https://odi.org/en/publications/assessing-and-strengthening-the-quality-of-public-finance-management-systems-the-pefa-framework/.
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.
Fjeldstad, O. H., & Heggstad, K. K. (2012). Local government revenue mobilisation in Anglophone Africa. ICTD Working Paper No. 7. Institute of Development Studies. https://www.ictd.ac/publication/local-government-revenue-mobilisation-in-anglophone-africa/.
Fjeldstad, O. H., & Moore, M. (2009). Revenue authorities and public authority in sub-Saharan Africa. Journal of Modern African Studies, 47(1), 1–18.
Gönsch, J. (2017). Revenue management: State of the art and research opportunities. Operations Research Forum, 1(1), 1–22.
Jam, A., Bayat, M. S., & Rulashe, T. (2024). Exploring Ethics in South African Municipal Procurement: Professionalism, Compliance, and Ethical Dimensions Interface. HOLISTICA Journal of Business and Public Administration, 15(1), 73-95.
Jam, A., Bayat, M., & Rulashe, T. (2025). Ethical nexus: Navigating organisational dynamics for enhanced compliance in municipal procurement processes. Journal of Local Government Research and Innovation, 6.
Kanyane, M. H. (2014). Exploring challenges of municipal service delivery in South Africa (1994–2013). Africa’s Public Service Delivery and Performance Review, 2(1), 90–110.
Khiva, N. L. A. (2023). Towards a framework for effective revenue management by state-owned entities: Exploring the Buffalo City Metropolitan Municipality. Doctoral dissertation, University of Fort Hare.
Kuhlengisa, I. R., Rulashe, T., & Jakoet-Salie, A. (2024). A critical analysis of the impact of indigent policies on socio-economic inequalities in South Africa: A case of Amathole District Municipality. International Review of Social Sciences Research, 4(3), 25-51.
Meyer, J. W., & Rowan, B. (1977). Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83(2), 340–363.
Miggels, A., & Rulashe, T. (2022). Organisational Change as a Tool for Transforming Governance in a Local Municipality, Nelson Mandela Bay Municipality in the Eastern Cape. Journal of Public Administration, 57(3), 508-528.
Murimi, M. K., & Wadongo, B. (2021). Revenue management practices in public sector organisations: Evidence from sub-Saharan Africa. Public Money & Management, 41(3), 213–222.
National Council of Provinces (NCOP). (2022). Oversight Report on Provincial Week: Eastern Cape Municipality Performance Review. Cape Town: Parliament of South Africa.
National Treasury. (2023). MFMA Local Government Revenue and Expenditure: Fourth Quarter 2022/23. Pretoria: National Treasury. https://www.treasury.gov.za.
North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press.
OECD. (2019). Digital Transformation in Public Sector Revenue Collection. https://www.oecd.org/tax/digital-transformation-in-tax-administration.htm.
Ogbe, E., & Lujala, P. (2021). Fiscal transparency and subnational government revenue: Evidence from Nigeria. Journal of Development Studies, 57(11), 1806–1823.
Okonjo-Iweala, N. (2021). Reforming Nigeria’s Subnational Fiscal Architecture: Reflections and Policy Imperatives. African Economic Research Consortium Policy Brief.
Pieters, M. (2019). An analysis of the revenue enhancement strategy of the Buffalo City Metropolitan Municipality. Master’s thesis, University of Fort Hare Institutional Repository. https://libdspace.ufh.ac.za/items/2dbaf574-50d7-476d-9686-2eb6d99602b2.
Pretorius, D., & Schurink, W. (2007). Enhancing service delivery in local government: The case of a district municipality. Journal of Public Administration, 42(5), 512–540.
Prichard, W. (2015). Taxation, Responsiveness and Accountability in Sub-Saharan Africa: The Dynamics of Tax Bargaining. Cambridge University Press.
Rao, M. G. (2018). Property Tax Reform in India: A Tale of Two Cities. Urban India, 38(2), 1–18.
Reddy, P. S., & Naidu, M. (2012). Municipal service delivery in the democratic South Africa. African Journal of Public Affairs, 5(2), 87–99.
Rulashe, T., & Ijeoma, E. O. (2022). An exploration of public accountability and service delivery at the Buffalo City Metropolitan Municipality in the Eastern Cape province. Africa’s Public Service Delivery and Performance Review, 10(1), 535.
Sainaghi, R. (2020). Revisiting demand forecasting: A revenue management perspective. International Journal of Hospitality Management, 89, 102528.
Smoke, P. (2000). Why theory and practice are different: The gap between principles and reality in subnational revenue systems. In Taxation and Development: The Weakest Link?
Statistics South Africa. (2023). Statistical release P0441: Gross domestic product, fourth quarter 2022. http://www.statssa.gov.za/publications/P0441/P04414thQuarter2022.pdf.
Tashakkori, A., & Teddlie, C. (2010). SAGE handbook of mixed methods in social & behavioral research (2nd ed.). SAGE Publications.
USAID. (2021). Local Revenue Mobilization and Expenditure Management: Good Practices Guide. https://urban-links.org/resource/local-revenue-mobilization-guide/.
Van Donk, M., Swilling, M., Pieterse, E., & Parnell, S. (2008). Consolidating Developmental Local Government: Lessons from the South African Experience. Cape Town: UCT Press.
Wampler, B. (2010). Participatory Budgeting in Brazil: Contestation, Cooperation, and Accountability. Penn State University Press.
World Bank. (2020). Enhancing Domestic Revenue Mobilisation in Sub-Saharan Africa: Digital Strategies and Governance Imperatives. World Bank Publications.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Nomonde Lindelani Avuyile Khiva, Mohamed Saheed Bayat, Tando Rulashe
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
The author fully assumes the content originality and the holograph signature makes him responsible in case of trial.
