City of Joburg owed R1.4bn by defaulting residents
Johannesburg - The City of Joburg suffered losses of more than R1.4 billion due to residents defaulting on their municipal rates and services just in April and May, since the outbreak of Covid-19.
All Gauteng municipalities - including the three metropolitan councils of Joburg, Tshwane and Ekurhuleni - are collectively owed a whopping R2.7bn due to the coronavirus pandemic.
This was revealed by the finance MEC Nomantu Nkomo-Ralehoko in her written reply to questions by the DA’s spokesperson on finance Adriana Randall in the legislature.
Randall asked what impact Covid-19 had on the collection of revenue and when municipalities would resume to cut services to residents who are defaulting on rates and services.
The questions arose after Finance Minister Tito Mboweni on March 30 asked municipalities and their entities to refrain from taking action against residents who are defaulting on the payment of their services during the lockdown.
In her reply, Nkomo-Ralehoko provided a breakdown on the impact of Covid-19 on each municipality, including the three metros.
She said the overall losses for April were R2.59bn and May R2.33bn.
Joburg was the hardest hit as it suffered revenue losses of R1.4bn for April and May.
As a result, Joburg last week served termination of service notices to residents and businesses alike.
This led to thousands of defaulters flocking to municipal offices to sign debt-settlement agreements to avoid spending the winter in darkness and without running water.
Tshwane failed to collect R578m, while Ekurhuleni suffered losses of R353m. Lesedi Local Municipality in Heidelberg suffered the least losses of R61000.
“The figures show that between April and May debtors increased by as much as R2.7bn.
“Mogale City did not provide information for uploading on the local government database of municipalities for May, and follow-ups are being made with the municipality.
“Looking at the trends at other municipalities, the total for May is likely to go up when the database is updated with information from Mogale City,” Nkomo-Ralehoko said.
Reacting to the figures, Randall said if this trend in revenue loss continued, municipalities would struggle to render services to its residents.
“Some municipalities have already been struggling to provide services because residents have not been paying, however, the Covid-19 pandemic has worsened the situation,” Randall pointed out.
She added: “The DA calls on the cooperative governance and traditional affairs MEC Lebogang Maile to closely monitor how the municipalities used the Covid-19 relief fund to ensure that adequate services are rendered to Gauteng residents in these difficult times.”
Maile had already indicated that part of the R12.8bn Covid-19 relief fund for local government announced by Mboweni in his Supplementary Budget last week was to be used by municipalities to provide services to their communities.
Maile said he intends to use some of the funds to allow all municipalities in the province to settle their debts to their major creditors Eskom and Rand Water.
Maile said as the financial year of municipalities ends on Tuesday, he wants all provincial municipalities to re-prioritise their spending in crucial areas where the need “is greatest”.