DA wants breakdown of debt owed to municipalities

Andrew Louw, MPL

DA Northern Cape: Provincial Leader

The Democratic Alliance will submit parliamentary questions to the Northern Cape MEC of COGHSTA, Alvin Botes, to ascertain who the main culprits are that owe outstanding debt to our municipalities.

As at the end of January this year, municipalities in the province were owed R1,5 billion by government departments and other entities. The DA is concerned that this huge amount of outstanding debt is going to exacerbate the already poor level of services being provided on a local government level.

Municipal debt is a major problem for municipalities and directly affects their ability to render services to their clients. A municipality’s ability to function depends on the money it collects from other spheres of government and ratepayers. Without a revenue stream, it cannot deliver services and invest in infrastructure. In other words, without a revenue stream, it becomes futile. It is then little wonder that local government services across the province remain desperately lacking.

The DA particularly wants to know which municipalities are most affected, as well as how much of the outstanding debt is owed by households, businesses and government departments. It is also important to establish the age of the debt. Debt less than 60 days outstanding should generally not be of concern. But debt older than 60 days is very worrying, as experience indicates that it is unlikely that municipalities will be able to collect debt older than 60 days.

The DA is of the view that R1,5 billion can make a huge difference in the cash flow and liquidity of Northern Cape municipalities and improve their ability to deliver services. In this regard, the Northern Cape requires a serious interrogation of the state of municipal finances in the province.