Eskom’s municipal debt must be addressed

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.

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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?