Eskom owed R81.6 billion by municipalities: Who owes the most?

South Africa has 18 municipalities with an outstanding Eskom debt of over R1 billion.  

The Minister of Electricity and Energy Kgosientsho Ramakgopa detailed the extent of the debt in a 1 October written response to a parliamentary question.

The response listed the individual debts of almost 100 municipalities, with the total amount owed across the country sitting at R81.6 billion as of the end of July.

R316 million owed by private business

Electricity-intensive industries were specified, with those registering a debt of just over R1 billion.

Non-private businesses accounted for R683 million of that figure. Broken down by industry, the industrial sector owed R102 million while the commercial sector owed R81 million.

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Mining and agriculture accounted for R67 million and R66 million in debt, respectively.

“The Top 20 private business accounts accounted for 47% — R149 million — of the R316 million overdue debt for private businesses,” stated the minister’s response.

Free State and Mpumalanga deepest in debt

At R21.4 billion, Mpumalanga’s debt works out to roughly R4,100 per person in the province with 5.1 million people.

It has five councils owing over a billion, with eMalahleni Local Municipality, the highest nationally, with just over R9 billion in arrears.

However, the per capita debt obligation of the Free State is the highest, with their R22.6 billion bill equating to approximately R7,700 for each of their 2.9 million population.

The Free State also has five municipalities owing over R1 billion, with Maluti-A-Phofung Local Municipality’s account standing at over R8 billion.

The debts owed to Eskom in Mpumalanga. Picture: Ministry of Electricity and Energy

Gauteng R20 billion in the red

Emfuleni Local Municipality is the highest account in arrears of Gauteng’s eight listed councils.

Eskom has just reached a deal to take over the municipality’s billing after its accounts were attached by the Sheriff of the High Court in September.

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Emfuleni owes R7.3 billion, while the Tshwane and Johannesburg accounts sit at R4.6 billion and R3.6 billion each.

The City of Ekurhuleni round out the four billion-plus bills with a current debt of R1.4 billion, giving Gauteng a combined debt of R19 billion.

A breakdown of the debt owed to Eskom in Gauteng. Picture: Ministry of Electricity and Energy

Best of the rest

Of the 11 KwaZulu-Natal municipalities owing Eskom, none break the billion-rand threshold, while the province’s total debt is R1.9 billion.

The Eastern Cape owes R3.7 billion, with the worst offender being the Enoch Mgijima Local Municipality with R1.2 billion.

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Limpopo’s Modimolle-Mookgophong Local Municipality owes a little over R1 billion, making up the vast majority of the province’s R1.3 billion debt.

Of the 34 municipalities listed for the North-West and Northern Cape provinces, just two break R1 billion, but still have a combined debt of R11 billion.

The Western Cape, a province that prides itself on revenue collection, has an outstanding debt of R289 million.

Of the 96 municipalities listed, 43 have a greater outstanding debt than the whole of the Western Cape province.

Collapse by 2050

Minister Ramakgopa warned that should the debt levels not be brought under control, the situation would become unsustainable.

“If we don’t resolve this problem, our projection is that at the current rate, by 2050, Eskom will be owed R3.1 trillion. Eskom will collapse.

“Generation capacity is going to be compromised. So, it’s important that we resolve this question,” stated Ramakgopa earlier.

“The biggest victims of all of that is the end consumer and, by definition, is the South African economy,” he concluded.

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