Consumers owe municipalities more than R118bn, Salga reveals
Municipalities across the country are owed a whopping R165.5 billion and some of it dates back to the apartheid-era consumer boycotts.
The amount was R165.5bn by the end of June this year and increased from R143.2bn from the previous financial year.
"Whereas municipal debt to Eskom (for electricity) and water boards and the Water Trading Entity (for water) sits at R25bn and R14.9bn respectively, debt owed to municipalities for municipal services already delivered, is currently sitting at a whopping R165.5 billion as at 30 June 2019 (compared to R143.2bn reported in the same quarter of the previous financial year),” the SA Local Government Association (Salga) announced on Thursday.
According to Salga, the largest component of debt relates to households which owe R118.6bn.
The government’s outstanding debt represents 6.2% or R10.3bn of the total debt.
"Metros consumer debts account for 49.7% of the total consumer debt of R165.5 billion, of which government debt constitutes approximately R10.5bn and business constitutes approximately R23bn,” the association’s president and Polokwane mayor Thembi Nkadimeng.
The national Public Works department has the largest debt of R3bn while provincial public works, roads and transport departments owe R3.7bn.
"It is evident that there is a clear link between the ability of a municipality to service its debt, including that to Eskom and water boards, and the inability of a municipality to collect from government, business and households for services delivered,” she said.
Salga has taken the drastic steps of urging municipalities to urgently and aggressively enforce credit control management measures including targeting government properties and businesses, through disconnection where there is sufficient merit in line with their credit control policies.
The association wants municipalities to conduct a rigorous analysis of the gross debt and restructure debts to see those realistically collectable and those considered for write-off.
Nkadimeng said when uncollectible debt has been written-off pre-paid meters will be installed.