Municipal debt is growing, and threatens the ability of the country’s local governments to provide services to their communities.
This is according to the South African Local Government Association (SALGA). The body, which represents the country’s municipalities, says that accumulated municipal debt stood at a ‘whopping’ R165.5 billion at the end of June 2019. This was substantially up on the R143.2 billion recorded in the previous financial year.
SALGA chief executive Xolile George said that, of this sum, ‘only R40 billion is recoverable’.
Nearly three quarters of the debt came from households. This is a very sensitive issue, since enforcing credit control measures can generate political blowback, often making such debts politically uncollectable.
Municipalities meanwhile owed Eskom some R25 billion, with a further R14.9 billion owed for water provision. A failure to collect on their own debts compromised the ability of South Africa’s local governments to pay its creditors.
SALGA president Thembi Nkadimeng pledged action on this and called on consumers to do likewise: ‘We are going to conduct a rigorous process on this gross debt and restructure the debt realistically. Our message is very clear: Pay us so we can our service providers.’