Eskom’s municipal debt must be addressed
The dire debt situation is largely due to incompetent and corrupt management, while there is a culture of nonpayment.
An Eskom employee outside the Kendal power station in Mpumalanga on 28 June 2022. Picture: Neil McCartney / The Citizen
That municipalities’ debt to Eskom is spiralling out of control is no secret. However, the extent of the debt is frightening.
Municipalities owed Eskom a staggering R63 billion by the end of August.
And it’s growing by an alarming rate of about R2 billion a month.
This is happening despite National Treasury’s debt relief programme, which allows government to pay their current accounts provided they stick to conditions.
What’s worse is that more than 70% of local authorities are on the verge of collapsing, leaving the country on a dangerous collision course towards a serious financial crisis.
ALSO READ: Court ruling on Emfuleni and Eskom a sign that municipalities unable to deliver services
The amount owed now is believed to be around R70 billion.
Chief economist at Efficient Group Dawie Roodt said: “We need to remember that state-owned enterprises have also mostly collapsed and they will also become a problem for the minister of finance.
“In the meantime, the minister’s finances have deteriorated quite sharply. So the chickens, as I say, are coming home to roost. We are heading for some serious trouble.”
The dire debt situation is largely due to incompetent and corrupt management, while there is a culture of nonpayment, with billions owed by municipal customers.
We cannot allow this to continue. At what stage is enough, enough?
For more news your way
Download our app and read this and other great stories on the move. Available for Android and iOS.