Debt to municipalities doubled in past five years to R255bn

September 3, 2022

South African city councils struggle to collect payments for services from consumers and in turn can’t pay their suppliers. That’s led to Eskom threatening to cut off electricity until it’s paid, including a warning last week to the City of Tshwane, which includes the nation’s capital, Pretoria, that it will be disconnected.

South African city councils struggle to collect payments for services from consumers and in turn can’t pay their suppliers. That’s led to Eskom threatening to cut off electricity until it’s paid, including a warning last week to the City of Tshwane, which includes the nation’s capital, Pretoria, that it will be disconnected. Getty Images

Debt owed to South African towns and cities almost doubled over the past five years, weighing on municipal finances and increasing the risk that the supply of basic services such as water and electricity will be disrupted.

Consumers owed municipalities R255.4 billion by the end the financial year through June 30, compared with R232.8 billion a year earlier, according to data the National Treasury published on Friday. Households account for 71% of this. Of the outstanding debt, 86% is older than 90 days and may therefore not be realistically collectible.

South African city councils struggle to collect payments for services from consumers and in turn can’t pay their suppliers. That’s led to Eskom threatening to cut off electricity until it’s paid, including a warning last week to the City of Tshwane, which includes the nation’s capital, Pretoria, that it will be disconnected.

Municipalities owed their creditors R89.7 billion by June 30, up from R81.1 billion at the end of March, according to the Treasury. Town councils’ debt to Eskom alone was R49.1 billion rand by the end of July, Deputy President David Mabuza said last month.

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