Government debt cripples Limpopo municipalities
The DA in Limpopo has called on premier Phophi Ramathuba to effect sustainable repayment plans for the billions owed by the government to municipalities.
Limpopo municipalities are buckling under the weight of unpaid government bills – more than R1.2 billion owed by national and provincial departments and state-owned entities as of 30 June.
This mounting debt, revealed in the National Treasury’s latest local government revenue report, threatens essential services like water and electricity, with Polokwane alone owed R302 million amid a deepening water crisis.
According to a report for the third quarter of the 2024-25 financial year, debts owed to municipalities amount to R416.1 billion, compared to R347.6 billion in the same period in 2023-24.
‘Bad debt’
“A total amount of R10.8 billion or 2.6% has been written off as bad debt. The largest component of this debt relates to households and represents 72% or R299.5 billion (73% or R253.6 billion in the same period in 2023-24 financial year),” said the National Treasury.
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“The government debt accounts for 6% or R24.9 billion [R21 billion reported in the same period in 2023-24] of the total outstanding debtors. Total outstanding creditors owed by municipalities as at 31 March amount to R131.8 billion, an increase from R106.7 billion reported in the same quarter in 2023-24. About R111.8 billion or 84.8% has been outstanding for more than 90 days.”
The Treasury singled out the Free State (94.4%), Mpumalanga (93.9%), the Northern Cape (93.8%) and the North West (84.4%) as provinces with the highest percentage of outstanding municipal creditors for more than 90 days.
Calls for Ramathuba to take action
The DA in Limpopo has called on premier Phophi Ramathuba to effect sustainable repayment plans for the billions owed by the government to municipalities.
DA provincial chair Lindy Wilson said the lion’s share of the debt was owed by the department of land reform and rural development at R503 043 306, the public works at R482 457 382 and the department of education a staggering R131 629 893.
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Failure to settle municipal debt debilitates the ability to deliver essential services, specifically water and electricity infrastructure maintenance, Wilson said. She said R302 million was owed to the Polokwane municipality, which is in the midst of an unprecedented ongoing water crisis.
“Payment of government debt will greatly assist to repair and maintain the collapsed water infrastructure in the five regions of Limpopo.”
If government entities owe money to municipalities, their services should be cut off, Wilson said.
“The Public Finance Management Act and Municipal Finance Management Act allow municipalities to terminate services to government entities if their bills are not settled within 30 days.”
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