Municipal debt: read it and weep
Unpaid bills threaten entire SA economy, writes Donwald Pressly
SA is on the brink of a fiscal implosion at local government level but the R232bn owed by consumers (up from R165bn two years ago) hardly registered a blip on the radar during the recent municipal elections.The bulk of this debt to municipalities is rates and service charges owed by households. But provincial and national government departments and businesses are also increasingly failing to pay up.A fiscal sword of Damocles hangs over the bulk of the 278 municipalities, including eight metropolitan, 44 district and 226 local municipalities.Yet the big parties made no mention of the potential for big trouble as key local government indicators shift dramatically in the wrong direction.Economists.co.za director Mike Schüssler says it has a devastating "knock-on effect" with municipalities scrambling to make payment to creditors, principally Eskom. This is up sixfold from R6bn in 2016, when the previous local government elections were held.It means consumers have not been paying munici...
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