Salga conference tackles spiralling municipal debt

The South African Local Government Association (Salga) has warned that R427 billion in consumer debt is pushing municipalities across the country to the brink of financial collapse. Addressing delegates at a two-day strategic conference on Wednesday, Salga President Bheke Stofile said the staggering figure has left councils nationwide battling severe cash-flow shortages. The Oversight Role of Councillors in Revenue and Debt Management conference was held in Ekurhuleni, Gauteng, on Tuesday and Wednesday.

The event brought together councillors, representatives from national and provincial government, local governance experts, and civil society organisations. Many municipalities, Stofile said, were struggling to meet basic financial obligations and were increasingly vulnerable to liquidity shocks that threaten service delivery. Stofile highlighted a troubling contradiction at the heart of the crisis.

“Communities, businesses and government departments collectively owe municipalities more than R400 billion for services already rendered. “Despite this, many of these same stakeholders continue to demand uninterrupted water, electricity and other essential services while defaulting on their accounts,” he said. At the same time, municipalities themselves owe bulk suppliers including Eskom and various water boards about R120 billion.

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“This contradiction cannot be sustained indefinitely. It is neither fair nor workable to expect municipalities to pay bulk providers on time while major debtors, particularly those with the capacity to pay, default without consequence,” he said.

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