- Gauteng Cogta MEC Lebogang Maile is concerned about the state of some municipalities.
- Maile said seven of the province’s municipalities were considered at risk.
- Consumers and businesses owe municipalities billions for services.
Out of 11 municipalities in Gauteng, only two can be categorised as stable. The remaining seven are considered at risk of dysfunction and require significant monitoring, according to Gauteng Cogta MEC Lebogang Maile.
Maile was giving an update on Monday on the state of the province’s municipalities.
The seven municipalities of concern are Johannesburg, Tshwane, West Rand, Rand West, Sedibeng, Lesedi and Mogale.
In addition, two municipalities, Emfuleni and Merafong have been classified as dysfunctional and are in financial distress.
West Rand and Emfuleni are under administration.
Midvaal continues to outperform other municipalities in the province and Ekurhuleni is considered stable.
The criteria the Gauteng Cogta department used to classify municipalities of concern involved a combination of factors, including financial stability and servicing of debt.
A microscopic look at what drove the municipalities to the state they’re in shows that financially, most are struggling to survive.
Consumers owe them a combined R79.4 billion in the over 90-day payment window. A breakdown of the numbers shows that consumers owe R70.3 billion to municipalities for services. Businesses are responsible for R20.1 billion.
Maile said the province created a debt management committee and that his department was working on a strategy to help municipalities tailor their revenue collection for sustained growth.
However, he admitted that poor services hampered residents’ willingness to pay for services and that others had no funds. Only three municipalities, Ekurhuleni, Midvaal and Lesedi, have not reported any overdue accounts.
DA-run Tshwane and Johannesburg recently made headlines with the public shaming of businesses that owed millions in unpaid municipal services.
The strategy worked for the two metros, with the cities seeing an increase in revenue collection since taking a tougher stance on debt.
The debt that residents and businesses have directly impacts the debt municipalities has with Eskom and Rand Water. Gauteng municipalities owe Eskom R9.75 billion, Maile said. With Rand Water, the picture is just as grim.
The agency is owed R3.15 billion – an increase from R2.94 billion in the previous year.
Fruitless and wasteful expenditure
In the 2020/2021 financial year, fruitless and wasteful expenditure decreased to R23.62 billion – a R14.28 billion decline from the previous financial year.
Even though the outlook seems dire for Gauteng’s municipalities, Maile shrugged off any mention of administration.
“No, no, we are not thinking about placing any municipality under administration. All we want is well-run municipalities,” Maile told News24.