Municipalities Owed the Most
Consumers owe over R117 billion in services and rates debt to municipalities across South Africa, according to a report released by the National Treasury.
Of all the provinces, KwaZulu-Natal is among the top three for uncollected rates, revealed the report. On Friday, March 4, the local government revenue report was released by the National Treasury. It shows that, as at the end of December 2015, an overwhelming R14 billion in unsettled debt was owed to KZN municipalities.
Whereas Gauteng municipalities were owed R51 billion and Free State municipalities R11 billion.
Of the KZN municipality debt, R1.6 billion had been owed for 30 days, while R11.2 billion had been owed for over 90 days.
Top Metros Owed Debt
R6.5 billion of the R64.4 billion owed to South Africa’s eight metros is owed to eThekwini Metro. eThekwini’s debt has increased by R881 million since 2014/15 Q2. eThekwini metro ranked fifth for unsettled debt out of the eight other metros. The metro had been owed R755 million for 30 days, and R5.1 billion for over 90 days.
KZN’s secondary cities – Umsunduzi, Pietermaritzburg had been owed R1.8 billion and uMthlathuze, Richards Bay R381 million.
Metros were owed R42.1 billion in unsettled debt by households in metropolitan areas, R18.4 billion by businesses and R1.6 billion by the government nationwide.
Debt Owed to Creditors
Moreover, KZN municipalities owed the third most to creditors, after Gauteng and the Free State. KZN municipalities owed creditors R3.5 billion in total – R2.1 billion (61.2%) had been owed for 30 days, and R923 million had been outstanding for over 90 days.
As at December 31, creditors were owed a total of R27.4 billion by municipalities countrywide.
Of the R66.4 billion total allocated budgets, R28 billion (43.6%) had been spent by KZN municipalities by the end of December last year.
In contrast, of the R35 billion budget allocated for the same period, eThekwini had only spent R15 billion, with capital expenditure at below half (43.1%). Representing a 3.7% decrease in expenditure to R8.3 billion (48.2%) for 2014-15.
Similarly, neither uMsunduzi nor uMhlathuze spent even half of their budgets.
Neither KZN nor Gauteng municipalities received transfers to assist with any extra costs that may result from the move to different municipal boundaries. The National Treasury commented that “The non-transfer will most likely negatively impact the affected municipalities’ readiness for the transition.”
Whereas, Lennox Mabaso, spokesman for the Department of Co-operative Governance and Traditional Affairs said of the report, “It is not the true picture of what will pan out at the end of the financial year.”