Pretoria – Punch-drunk SA consumers owe municipalities more
than R75bn as municipal services become less affordable.
National Treasury said the sharp hikes in electricity
prices and the economic downturn are resulting in consumers no longer being
able to pay their municipal accounts.
The outstanding debt is equal to about 7.5% of the country's
budget for the new financial year and amounts to more than the combined budgets
of Johannesburg, Tshwane, Mangaung (Bloemfontein) and eThekwini (Durban).
The outstanding consumer debt in South Africa's eight metro
councils increased by more than one-fifth to R44.5bn in 2011 compared with the
year before. Johannesburg alone is responsible for 31.2%, or almost R14bn, of
The 19 secondary cities' outstanding consumer debt increased
by 13% to R13.1bn. A total R9.2bn of this is owed by households and 85% is more
than three months overdue.
These figures were published by National Treasury last week
as part of the quarterly review of municipal income and expenditure.
Government departments owe municipalities across the country
R3.5bn, but most is owed by households.
According to Treasury, municipalities budgeted for an
average collection rate of 91.8%, but in the first quarter of the financial
year a rate of only 78.7% was achieved. However, in the second quarter the rate
rose to 93.1%.
Economists.co.za chief economist Mike Schüssler said R58bn
of the outstanding consumer debt is older than 90 days, which is generally not
regarded as being collectable. This is despite continual write-offs.
represents 2% of South Africa’s gross domestic product (GDP) and more than a
quarter of municipalities’ own income. “No company in the world could survive
such a poor collection rate,” said Schüssler.
He said people can no longer afford municipal services. “If
everyone pays, tariffs could be considerably lower.”
Leon Claassen, an analyst at Ratings Africa, said the
average 16.5% increase in the budgeted revenue is high when compared to
Claassen however cautions about simply ascribing poor
collection to external factors.
“There are smaller municipalities in poorer areas with good
rates of collection. Other municipalities in wealthier areas perform worse in
terms of collections because of a lack of political will to exercise credit
control, or a managerial problem.”
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