COGTA expresses dismay with non-payment in MPU

GK CRONJE

15 September 2020

In August 2018, the recovery plan was announced to deal with the two major aspects of revenue streams, namely, revenue generation strategies and creditor repayment. However, despite being adopted and implemented by local councils, the situations in Emalahleni, Lekwa, Msukaligwa, Mkhondo and Govan Mbeki local municipalities have exponentially worsened while being under a provincial intervention.

Due to the failure of municipalities in Mpumalanga, and the mounting debt accrued by these entities due to financial mismanagement and failure to collect revenue, a financial recovery plan intervention announced in August 2018. The recovery plan was announced to deal with the two major aspects of revenue streams, namely, revenue generation strategies and creditor repayment. However, despite being adopted and implemented by local councils, the situations in Emalahleni, Lekwa, Msukaligwa, Mkhondo and Govan Mbeki local municipalities have exponentially worsened while being under a provincial intervention. It has also been cited that City of Mbombela, Thaba Chweu, Emalahleni and Govan Mbeki are calssified as financially non-viable municipalities in the province.

At the time, Emalahleni municipality owed Eskom R2,3 billion and was owed R3,8 billion by consumer debtors. “Despite being under the provincial intervention, these amounts increased substantially in the space of one year, to owing Eskom R3,5 billion and being owed R4,6 billion for services at the end of December 2019,” Grovè Morgan said. She said Govan Mbeki Local Municipality owed Eskom R1 billion, and was owed R1,4 billion for services which were provided until the end of December 2018. Since this announcement, the debt from municipalities have grown beyond control. Department of Cooperative Governance and Traditional Affairs (COGTA) spokesperson, George Mthethwa, urged those who have an interest in the effective functionality of Mpumalanga municipalities to mobilize communities to pay for municipal services.

“Local government is a regulated sphere or policy directed. What is crucial is that the financial distress that our municipalities find themselves in are due, in part, to the failure of some communities to pay for services. That is, non-payment of electricity and water. Unfortunately, the majority of our municipalities are grant dependent and payment of services is a revenue stream that must sustain them. However, if no revenue derived from the payment, then the financial position of the municipalities is affected.” Mthethwa stated.

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