Joburg owed a staggering R17.7-billion

14 March 2017 - 13:48 By Penwell Dlamini
Johannesburg skyline
Johannesburg skyline
Image: istock

The City of Johannesburg topped the country in the amount of debt owed to a municipality at R17.7-billion.

This was revealed in the local government revenue and expenditure report released by National Treasury yesterday on the second quarter of the 2016/17 financial year‚ which ended December 31 2016.

In total‚ metropolitan municipalities are owed R57-billion in outstanding debt‚ which is a R7.4-billion year-on-year decrease.

The City of Johannesburg had the highest debt‚ followed by the City of Ekurhuleni with R12.7-billion‚ City of Tshwane at R8.4-billion and Cape Town at R7.6-billion.

As at December 31‚ municipal consumer debt (including metros‚ local and district municipalities) amounted to R117.7-billion. The largest component of the debt belonged to households‚ which had R77.9-billion‚ 66.2%‚ of the total debt.

But National Treasury noted that some of the debt included in the R117.7-billion could be unrecoverable.

“It needs to be acknowledged that not all the outstanding debt of R117.7-billion is realistically collectable as these amounts are inclusive of debt older than 90 days‚ interest on arrears and other recoveries. If consumer debt is limited to below 90 days‚ then the actual realistically collectable amount is estimated at R23.8-billion‚” Treasury said in the report.

The report further showed that R915-million had been written off as bad debt by municipalities in the reporting period.

Households in metropolitan areas accounted for R36.9-billion or 64.7% of outstanding debt to metros‚ followed by businesses‚ which account for R16.9-billion or 29.7%.

Debt owed by government agencies is about R1.7-billion or 3% of the total outstanding debt owed to metros.

Municipalities were also on the debt books of their service providers. They owed their creditors R34.3-billion‚ an overall increase of R6.9-billion when compared with the same period in the previous financial year.

A total of 257 municipalities contributed in the report compiled by National Treasury.