Budget Overview: Four Years of Growth

Cape Town's 2025/26 budget totals R84.1 billion, the largest ever passed by a South African metro. It has two parts: R71.5 billion for operations (salaries, electricity purchases, maintenance) and R12.6 billion for capital (building and upgrading infrastructure).

This is no one-year spike. The budget has grown steadily since the DA took office in 2022, rising nearly 50% in three years. Capital spending has grown even faster, up 63% from the R7.8 billion allocated in 2022/23.

Looking ahead, the City projects R39.97 billion in infrastructure over the next three years, part of a larger R120 billion ten-year plan.

Where the Money Goes

The operating budget pays for everything the City does day to day. The biggest single cost? Buying electricity from Eskom at wholesale prices and reselling it to residents. That bulk purchase bill swallows about 35% of operating expenditure. Staff salaries take another 27%.

On the capital side, Water & Sanitation dwarfs every other directorate. The City is pouring R5 billion into pipes, treatment plants, and water sources in a single year.

Revenue: Where It Comes From

The City earns money four ways: selling electricity and water (trading services), taxing property (rates), receiving grants from national and provincial government, and miscellaneous income such as fines, rentals, and interest.

Property rates went up 7.96% for 2025/26. Despite that, Cape Town's rates remain the lowest of any metro in South Africa across residential, commercial, and industrial categories. The increase was tied directly to funding 500+ new law enforcement officers.

The Tariff Restructuring

The budget introduced three new fixed charges based on property value: a cleaning tariff, a fixed water charge, and a fixed sanitation charge. The City says these are not new costs but simply unbundle charges previously hidden inside electricity bills and pipe-diameter fees. The cleaning charge, for instance, replaces a 10% surcharge that was added to every electricity purchase.

Public reaction was fierce. More than 12,000 submissions opposed the new tariffs during the comment period. The City made concessions: extended the rates-free threshold, raised pensioner relief to R27,000 monthly income, and lowered fixed charges for homes under R2.5 million. But commercial properties got a one-year reprieve, with their cleaning tariff delayed until July 2026.

Capital Investment

The R12.6 billion capital budget is funded from reserves, government grants (USDG, Public Transport Network Grant, Integrated City Development Grant), and borrowing. Three-quarters of it directly benefits lower-income areas.

Water & Sanitation dominates at 40 cents of every capital rand. Urban Mobility (roads, public transport) takes another 21 cents. Together, these two directorates absorb over 60% of the City's entire infrastructure budget.

Safety & Security: R7 Billion Record

An all-time record R7 billion goes to safety and security, covering metro police, fire and rescue, law enforcement, traffic, and disaster management.

The centrepiece: 500+ new metro police officers deployed across every ward, the largest single-year expansion in over a decade. Another 200+ officers are dedicated to protecting infrastructure crews and construction sites from attack.

The Technology Stack

Beyond hiring, Cape Town is building one of Africa's most advanced municipal policing systems. The EPIC (Emergency Policing and Incident Command) platform integrates CCTV, aerial surveillance, drones, gunshot detection, body cameras, and dashcams into a single command picture. Total tech investment over the term of office: R800 million+.

The N2 "Hell Run": A Layered Safety Response

The stretch of the N2 highway between Cape Town International Airport and the city centre has been one of South Africa's most dangerous roads for over a decade. Criminals throw rocks and concrete blocks from bridges to shatter windshields, place spikes on the road to puncture tyres, and exploit traffic congestion to rob stranded motorists at gunpoint. The corridor has been dubbed the "hell run" by commuters. In December 2025, a retired teacher, Karin van Aardt, was fatally stabbed at a traffic light just off the highway after leaving the airport, an incident that drew national headlines.

The City's response is a multi-layered strategy combining personnel, technology, and physical infrastructure:

The N2 Edge Wall: R114 Million and Counting

The most visible and controversial element is the N2 Edge safety project: a three-metre-high, roughly nine-kilometre security barrier to replace a dilapidated concrete palisade fence that the mayor described as having "nearly nothing left of it." The project was formally approved in the January 2026 adjustment budget at R114 million (some reports cite R115M), with R7 million for design in the current year and R108 million for construction in 2027.

The project goes beyond the wall itself. It also includes new pedestrian crossings, improved lighting, safety barriers for recreational spaces, embankment stabilisation and landscaping, measures to reduce illegal dumping, and improved grazing management for livestock that wander onto the highway.

The Backlash

The N2 Edge project has become one of the most politically charged infrastructure decisions in Cape Town's recent history. Critics span the political spectrum:

Water & Sanitation: The Biggest Spender

R5 billion in 2025/26, more than double what was spent in 2022/23. Over three years, R16.5 billion goes to water and sanitation, representing over 40% of all capital spending. No other directorate comes close.

The spending covers new supply sources (including a planned R5 billion Paarden Eiland desalination plant), water reuse facilities, aquifer projects, and upgrades to all 23 wastewater treatment works. The City has also installed 110 permanent generators at sewer pump stations and telemetric alarm systems across all 487 pump stations.

This spending traces directly back to the 2017/18 Day Zero drought, when the city came within weeks of shutting off taps entirely. Every budget since has treated water resilience as existential.

The Social Package

Cape Town's social support package totals R5.1 billion for 2025/26, split between R2.4 billion in rates rebates and R2.7 billion in indigent relief. Over 700,000 properties (80% of all properties in the city) receive some form of relief.

On electricity, the City absorbed part of Eskom's 12.74% increase and limited the consumer increase to 9.32%. Lifeline customers using 600 units per month pay roughly the same now as they did three years ago.

The Tariff Court Battle

This budget is now the subject of one of South Africa's most significant municipal finance court cases. SAPOA (the South African Property Owners Association) filed papers in July 2025 challenging the three new fixed tariffs. Its members include owners of the V&A Waterfront, Canal Walk, Cavendish Square, and Blue Route Mall.

The case was heard over three days in December 2025 by a full bench of the Western Cape High Court. AfriForum brought a parallel challenge. In a pointed exchange, judges asked whether any law requires municipalities to "tighten their belts." The City could not point to one.

How Cape Town Compares

Cape Town's three-year infrastructure plan of nearly R40 billion matches the combined capital budgets of Johannesburg, Tshwane, and Ekurhuleni. Its water and sanitation spending alone (R16.5 billion) exceeds the entire capital budgets of Tshwane and Ekurhuleni combined.

The City's R84.1 billion represents about 12% of all municipal spending nationally from a single metro. Nationally, municipalities collectively budgeted R698 billion for 2025/26, but many are running operating deficits. Cape Town consistently receives clean audits and maintains investment-grade credit ratings.

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