Mangaung has the least consumer debt

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Drastic steps against the biggest defaulting consumers – including government departments and entities – might have landed the Mangaung Metro Municipality at the bottom half of the list of metros with outstanding debt countrywide. The municipality started last month to intensify efforts to get those with outstanding bills to pay up.
The latest report on local government revenue and expenditure for the first quarter of the 2018/2019 financial year now shows that the municipality – that includes Bloemfontein – is one of the metros with the least consumer debt in the country. According to the report released by National Treasury, metro municipalities were owed a total of R84.8 billion by the end of September this year. Consumer debt to all these municipalities was R72.8 billion at the same time last year, showing an increase of R12 billion this year.
The City of Johannesburg is owed the largest amount (R21.7 billion), followed by the City of Ekurhuleni at R16.4 billion. Third on the list is the City of Tshwane at R12.6 billion, and eThekwini at R11.5 billion. The Mangaung Metro and the City of Cape Town, together with Buffalo City and Nelson Mandela Bay, are at the bottom of the list. Politicians and government employees working for the Free State Legislature were left in the dark when the municipality went ahead and cut their building’s electricity. Consumers with water debt were also sent final letters of demand and customers were warned that they had 14 days to settle outstanding amounts.
The financial woes of metro municipalities have, however, led to the municipalities owing service providers R50.7 billion. This is despite an above budget collection rate nationally. National Treasury says the year-on-year increase in outstanding creditors could be an indication that municipalities are experiencing liquidity and serious cash flow challenges.
The report indicates that these municipalities are also crippled by the outstanding debt owed by government departments and businesses. Households account for the biggest chunk of outstanding debt – a staggering R65.3 billion – while businesses account for R15.3 billion. Government departments and entities owe approximately R2.5 billion.
All metro municipalities have, however, exceeded their billing targets for the quarter. The report states that the billing targets do not necessarily meet the target for collections and that not all outstanding debt is collectable. – Cathy Dlodlo
cathy@centralmediagroup.co.za