South African municipalities are heavily in debt – and it’s largely due to unpaid bills coming from households in the country’s biggest metropolitan areas.<\/p>\n
This is according to the latest local government revenue and expenditure report for the second financial quarter, released by SA Treasury this week.<\/p>\n
Treasury reports that\u00a0aggregate municipal consumer debt has increased to R117.9 billion<\/strong> in the second quarter of the financial year (to December 2015) – up from R115.9 billion recorded in the previous quarter.<\/p>\n The largest component of debt owed is attributable to households, who owe R77.8 billion (or 66%) of the total.<\/p>\n Alarmingly, Treasury\u00a0noted that only a fraction of the debt is “realistically recoverable” as it includes debt older than 90 days\u00a0 – historic debt accumulated over a long period.<\/p>\n Only R22.7 billion of the total debt is realistically recoverable<\/strong>, Treasury said, while noting that R574 million was written off as bad debt over the period.<\/p>\n Metropolitan municipalities are owed the most, accounting for R64.4 billion of total outstanding debt\u00a0– an increase of R9 billion year-on-year, the report said.<\/p>\n Of this number, households owe R42.1 billion (65%); businesses owe R18.4 billion, and government owes R1.6 billion.<\/p>\n These are the biggest offending metros by the amount owed:<\/p>\n Treasury also reported that South African municipalities owe R27.4 billion to creditors – R1 billion more than the previous quarter.<\/p>\n The Free State has the highest percentage of outstanding creditors greater than 90 days at 80.5%, followed by the North West Province at 74.4% and Mpumalanga at 70.3%.<\/p>\n “This\u00a0year-on-year increase in outstanding creditors could be an indication that municipalities are experiencing liquidity and cash challenges,” Treasury said.<\/p>\n On aggregate, municipalities have spent only 42.7%, or R159.4 billion, of the total adopted budget of R373.5 billion as at 31 December 2015.<\/p>\n In respect of revenue, aggregate billing and other revenue amounted to 48.6% or R180.3 billion of the total adopted revenue budget of R371.1 billion.<\/p>\n Capital expenditure amounted to R21.6 billion or 32.4% of the adopted capital budget of R66.9 billion.<\/p>\n “Generally, spending has increased from the first quarter of this year, but it is still a poor performance compared to the second quarter of the previous year,” Treasury said.<\/p>\n Eskom debt heading to R350 billion<\/a><\/strong><\/p>\n Beware: Debt collectors are coming for your e-toll fees<\/a><\/strong><\/p>\n SA schools hand defaulting parents over to debt collectors<\/a><\/strong><\/p>\nWho owes the most<\/h3>\n
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Not paying on time<\/h3>\n
More on debt<\/h3>\n