MUNICIPAL DEBT SHOCKER
The South African Local Government Association has painted a shocking picture of the debt owed to municipalities countrywide.
Salga spokesman Mogomotsi Mogodiri said as of March this year the total debt owed to municipalities (metropolitan and secondary cities) was more than R35billion.
She said the total debt owed stood at R35,5 billion and gave the breakdown as follows:
lFor metros it was R26,6billion of which R20,4million had been owed for more than 90 days.
lFor high-capacity municipalities it was R8,9billion and of that, R7,7 billion was overdue by more than 90 days.
Salga chairman Amos Masondo said residents, businesses and government departments were not paying.
The debt was having a negative effect on the quality of services being rendered,
He said it also threatened the financial viability of these municipalities.
He said Salga urged municipalities to implement a multipronged approach to debt collection.
He said intergovernmental forums could also become involved.
But Masondo said Salga supported the call by the auditor-general for municipalities to cancel irrecoverable debt since not doing so would place them in a perpetual state of financial disarray.
"This is a welcome move since it will provide a fresh opportunity for municipalities to get their books in order and pave the way for clean audit reports," he said.
"For this initiative to achieve its aim Salga believes that those who are in a position to pay, be it residents, other end-users or government departments, should settle their outstanding debts to municipalities without further delay or make acceptable arrangements.
"Every effort, including making payment arrangements and other credit control measures, should be taken to recover these outstanding debts," he said.
He said Salga acknowledged that a number of challenges in specific areas remained with regards to capacity shortcomings.
He cited poor audit reports as one of them.
"All of this notwithstanding, the performance of local government has shown general improvement in various areas when assessed against the five-year local government strategy agenda," he said.