Report shows that consumers owe municipalities R416.1 billion
As of March 31, total consumers debt owed to municipalities amounted to R416.1 billion when compared to R347.6 billion that was reported in the same period in 2023/24.
This is according to a report released by National Treasury on local government revenue and expenditure for the third quarter of the 2024/25 financial year.
'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),' National Treasury said on Wednesday.
The third quarter publication covers 257 municipalities on financial information and conditional grant information.
'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 2025 amount to R131.8 billion an increase from R106.7 billion reported in the same quarter in 2023/24. R111.8 billion or 84.8% has been outstanding for more than 90 days,' said Treasury.
Provinces with the highest percentage of outstanding municipal creditors in the category greater than 90 days include the Free State at 94.4%, Mpumalanga at 93.9%, the Northern Cape at 93.8%, and the North West at 84.4%.
An increase in outstanding creditors could be an indication that municipalities are experiencing liquidity and cash challenges and consequently are delaying the settlement of outstanding debt owed.
'Analysis of the collection rates indicates that while municipalities' average collection rate on the adjusted budget is 85%, the aggregated actual collection against billed and other revenue is only 63.6 percent. The metros budgeted (adjusted budget) for a 87.9% collection rate and collected only 58.2%. The secondary cities budgeted billing was 86.3% and the actual collection was 69.7%,' it explained.
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