File Image: IOL
File Image: IOL

KZN treasury head warns culture of non-payment will cripple municipalities

Time of article published Jul 10, 2019

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PIETERMARITZBURG - KwaZulu-Natal Treasury Head Simiso Magagula says there needs to a drastic change in the attitude of consumers when it comes to paying municipalities for services because if the non-payment culture persists local government will be unsustainable.

He said this during a post-budget press briefing at the KwaZulu-Natal Legislature on Wednesday, just hours after it emerged that Msunduzi Municipality's debtors book had reached R3,487 billion in May this year.

"You cannot fault municipalities in this regard, unless consumers change their attitude the problems regarding debt will continue. There needs to be a sense of responsibility from consumers to pay for services rendered by municipalities," Magagula told the media on Tuesday.

Three months ago Msunduzi municipality was placed under administration owing to a string of problems including governance and the roll-out of services.

While some expected better news since the arrival of administrator Sibusiso Sithole, councillors were told on Tuesday that the situation was deteriorating at the municipality as debts from consumers, who range from households to government departments and businesses, continued to rise. The report presented to a full council warned of a threat to the municipality's future sustainability. 

"The municipality must introduce measures to ensure acceptable levels of debt collections and thereby mitigating the risk of cash flow problems in future," said the report. 

There are fears that debt levels have risen further in the last six weeks since the report was compiled.   

For many councillors, the report warranted drastic action, especially from the revenue collection division which falls under the Finance Business Unit.

According to DA leader in council Sibongiseni Majola, the report was cause for concern because it indicated a failing revenue collection strategy. 

Council Speaker Jabu Ngubo said a more aggressive approach was needed in recovering debts, especially businesses who "make profit out of our services".

The administrator also conceded that the report should shock everyone who has an interest in the sustainability of the municipality. He promised that at the August sitting, council would be provided with an updated report on how they would improve revenue collection. Msunduzi municipality is not the only one facing problems as Mooi Mpofana Municipality which is 68 kilometres away from the KZN capital faces a blackout over its failure to pay Eskom which stands at R123 million.   

In June this year, Cooperative Governance and Traditional Affairs MEC Sipho Hlomuka opted to negotiate directly with Eskom after the power supplier indicated that it would conduct cuts at the debt-laden municipality. Last year Cogta  revealed that KZN municipalities were collectively owed R13 billion by consumers.  

African News Agency (ANA)

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