Residents and businesses in the City of Tshwane owe the municipality an astounding R24-billion, which is 6.7% more than the pre-audited amount for the fiscal year 2023-2024.
Lebogang Maile, the Gauteng MEC for finance and economic development, revealed this on Tuesday as he deliberated about the state of finances and governance in the administrative capital.
Maile emphasised that households account for the majority of this debt, recording 72.8% at R17.7-billion, and commercial businesses come in second at R5.8-billion, recording 23.9%.
“This indicates that the implementation of credit control policy is not effective. This has a negative impact on the liquidity of the municipality,” said Maile.
Electricity debt increases
These debts to the municipality have allegedly influenced the outstanding creditors, which have surged to R11-billion.
Maile said electricity debt has grown by nearly R1-billion, while bulk water debts have decreased.
Water debt is currently at R517-million, while trade creditors have grown by nearly R4-billion.
“It is commendable that the city has honoured its arrangement with the bulk water utility, implementing a relief plan to settle the current account within 45 days.”
The City of Tshwane owes R7.8-billion as of September 30, 2024, up from R7.5-billion based on pre-audited reports for the current fiscal year, according to Maile, who also cited the Section 41 Report about Eskom.
He said: “This balance does not match the financial data the municipality reports through its financial system.
“The GPT will, moving forward, sensitise the municipality on when they have outstanding balances with Eskom and, where necessary, mitigate disputes between the two parties while also working to facilitate a payment agreement that does not imperil either party.”
Disagreements with businesses
The majority of businesses purposefully fail to pay their debts to the municipality due to disagreements, according to Nasiphi Moya, executive mayor of the City of Tshwane, and the municipality is working to address the issue.
She stated the municipality is approaching every business in compliance with the policies and that taking extreme measures, like shutting down operations, would also fall within the council-approved policies.
According to Moya, the primary cause of the ongoing problems with electricity and water is a lack of infrastructure maintenance.
She rated the severity of the situation, pointing out that Tshwane still had asbestos pipes and that there was not enough money for grass cutting.
Moya stated that she was collaborating with her team to make sure the auditor-general’s recommendations were being followed and that the municipality was able to surpass the debt threshold.
