Struggling municipalities begging for debt relief

WHILE the debt write-offs have given struggling municipalities some breathing space, many still face challenges with compliance.

- MASABATA MKWANANZI

By early 2025, Eskom and Treasury figures showed that municipal debt had climbed to about R90 billion, with 71 municipalities taking part in the debt relief programme.

However, a large number of municipalities are at risk of being removed from the programme for failing to meet repayment and revenue collection requirements.

The embattled Emfuleni Local Municipality (ELM) is the latest to ask for a bailout. The municipality, which owed Eskom R8bn in unpaid electricity bills before the National Treasury scrapped a portion of the debt, is once again pleading for another bailout.

In May 2024, the National Treasury instructed Eskom to write off more than R1.9bn of Emfuleni’s debt after the municipality met most of the debt relief programme’ conditions. At the time, Treasury cautioned Emfuleni to adhere to strict conditions or risk termination from the debt relief programme. The municipality admitted there was still work to be done to fully meet Treasury's requirements and settle the outstanding two-thirds of its Eskom debt, which amounts to more than R3bn.

Inlight of this development, ActionSA slammed Emfuleni’ latest plea, describing it as yet another sign of fiscal irresponsibility. The party noted that this appeal comes just months after the closeout of a six-year Section 139(1)(b) intervention by the Gauteng Provincial Government, a process that consumed vast public resources but produced little evidence of a sustainable turnaround.