Debt owed to municipalities and cities leapt to more than R300bn in the final quarter of last year, adding to the financial woes of municipalities struggling to meet revenue targets amid persistent power cuts.
Residents owed R305.8bn by December 31, compared with R261.5bn a year earlier, with households accounting for 71% of the total, data published by the National Treasury on Monday show.
About 84% of the arrears has been outstanding for more than 90 days and may therefore not be realistically collectible.
City councils struggle to collect payments for services from consumers and in turn battle to pay suppliers, including Eskom, which has threatened to cut off their electricity supply.
Municipal revenue has also been hit by the power utility’s inability to meet demand for energy, a situation that’s set to worsen as numbers increase of consumers who can afford to go off the grid.
Finance minister Enoch Godongwana last month announced tax rebates for individuals who install new solar panels at private residences and expanded incentives for businesses. A strong take-up could remove most paying customers from the municipal electricity distribution network, Business Day newspaper reported, citing South African Local Government Association chairman Lesetja Dikgale.
Revenue earned by the country’s eight largest municipalities from energy sales fell 6.5% in the quarter through December 31 from a year earlier, and slumped 17.4% for the 19 secondary cities, Treasury data shows.
More stories like this are available on bloomberg.com
Debt owed to municipalities jumps to more than R300bn in final 2022 quarter
Image: File/Freddy Mavunda
Debt owed to municipalities and cities leapt to more than R300bn in the final quarter of last year, adding to the financial woes of municipalities struggling to meet revenue targets amid persistent power cuts.
Residents owed R305.8bn by December 31, compared with R261.5bn a year earlier, with households accounting for 71% of the total, data published by the National Treasury on Monday show.
About 84% of the arrears has been outstanding for more than 90 days and may therefore not be realistically collectible.
City councils struggle to collect payments for services from consumers and in turn battle to pay suppliers, including Eskom, which has threatened to cut off their electricity supply.
Municipal revenue has also been hit by the power utility’s inability to meet demand for energy, a situation that’s set to worsen as numbers increase of consumers who can afford to go off the grid.
Finance minister Enoch Godongwana last month announced tax rebates for individuals who install new solar panels at private residences and expanded incentives for businesses. A strong take-up could remove most paying customers from the municipal electricity distribution network, Business Day newspaper reported, citing South African Local Government Association chairman Lesetja Dikgale.
Revenue earned by the country’s eight largest municipalities from energy sales fell 6.5% in the quarter through December 31 from a year earlier, and slumped 17.4% for the 19 secondary cities, Treasury data shows.
More stories like this are available on bloomberg.com
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