‘Uncollectable’ debt at municipalities totals more than R144bn
Aggregate municipal consumer debt climbed R46.5bn or 33.6% last year to reach R184.7bn by end-December.
However, more than two thirds of this debt, R144.8bn, has been owing for longer than 90 days and is regarded by the Treasury as being “realistically uncollectable”.
According to figures provided by Treasury, aggregate municipal debts stood at R138.2bn at the end of December 2017.
In a report on the local government revenue and expenditure figures for the six months between July and December 2018, Treasury said that if consumer debt is limited to less than 90 days, the actual realistically collectable amount is estimated at R39.9bn. This should not be interpreted that the National Treasury suggests the balance be be written-off by municipalities.
“It needs to be acknowledged that not all the outstanding debt of R184.7bn is realistically collectable, as these amounts are inclusive of debt older than 90 days [historic debt that has accumulated over an extended period], interest on arrears and other recoveries,” the Treasury said.
The report said that the government accounted for 5.3% (R9.8bn) of the total outstanding debtors, compared with R7.4bn as at end-December 2017.
Households represented the largest component of this debt at 73.8% (R136.3bn) up from 71.8% (R99.2bn) in 2017.
Metropolitan municipalities are owed R100bn in outstanding debt as at end-December 2018. The City of Johannesburg is owed the largest amount at R35.7bn, followed by Ekurhuleni at R16.1bn, Tshwane at R12.9bn and etTekwini at R12.5bn.
Secondary cities are owed R36.5bn of which R31.1bn or 85.3% has been outstanding for more than 90 days.
Municipalities owed their creditors R50.9bn as at December 31, an increase of R9.7bn over the R41.2bn reported in December 2017.