Cogta concerned about ballooning consumer debt at KZN municipalities
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MANY consumers in KwaZulu-Natal are “struggling” to service their municipal debts.
The Department of Co-operative Governance revealed that the municipal consumer debt in the province has swelled by R3.4 billion.
It said the latest audited figures released by the department indicate that the province’s municipalities saw an increase in consumer debt of R3.47bn between the 2018/19 and 2019/20 financial years: the debt grew from R23.8bn to R27.2bn during this period, which represents a 14.45% increase.
Cogta MEC Sipho Hlomuka said: “We are concerned about the increase in consumer debt and, as a department, we are rolling out measures that are aimed at assisting municipalities in the recovery of debt owed by their consumers.
Several municipalities have been identified as needing support to address the consumer debt issue in the 2021/22 financial year.
For these municipalities, he said, support would include crafting a consumer debt recovery plan with the respective municipalities and support with the implementation and monitoring.
Hlomuka said the increase is partly due to economic conditions that have deteriorated as a result of the outbreak of the novel coronavirus, which has seen households and businesses across the province struggling to pay for municipal services.
“We are concerned about the increase in consumer debt and, as a department, we are rolling out measures that are aimed at assisting municipalities in the recovery of debt owed by their consumers,” said Hlomuka.
Hlomuka has also commended municipalities that are proactively dealing with consumer debt by providing debt relief to consumers by getting them to commit to a payment plan with the affected municipality then writing off the interest.