POLOKWANE – Limpopo municipalities owe Eskom more than R538 million at the end of July this year, comprising debt of 30 days and longer.
The South African Local Government Association (Salga) Limpopo Chairperson, Thembi Nkadimeng, briefed media last Friday about the outcome of the Salga annual Provincial Executive Committee (PEC) meeting. She said this was 6,24% of the national municipal debt compared to the 8,37 % as at March 2017.
Nkadimeng said Salga’s view was that one cannot shut down electricity as the economy will collapse and many people will lose their jobs, leading to less tax revenue collected as the tax base was reduced, which will ultimately lead to less services rendered.
Another issue under discussion was the annual municipal statements that had to be submitted to the office of the Auditor-General and was not done timeously by at least five municipalities.
“Standard management issues were discussed,” Nkadimeng said. “Issues like service delivery and the development of municipalities and we looked at technical reports as well.”
The issues of Eskom debt and timeous submission of financial statements were described as some of the main challenges dealt with by Salga. The financial statements have to be submitted by 31 August every year, according to legislation. Nkadimeng said a critical problem was a lack of capacity and added there were 11 vacancies for Chief Financial Officers (CFO) among 27 municipalities, amounting to about half the municipalities in the province being without CFOs. She said retaining these critical skills was a problem, as people stay for 18 months and then leave for greener pastures.
Nkadimeng added in Mokgalakwena there had been no council meeting for six months.
Altogether R337 million of the Eskom debt is outstanding by five municipalities, which include Ba-Phalaborwa, Musina, Bela-Bela and Thabazimbi.
Some of these municipalities such as Musina and Thabazimbi already received a life buoy from Treasury, but the sheriff claimed some of the money for servicing outstanding debt.
Political and administrative instability in municipalities was seen as giving birth to more problems so Salga will assist the struggling municipalities to address dysfunctional areas and overcome instability.
“It is Salga’s role to understand what plays a role in the identified municipalities with challenges, especially the ones that did not submit their financial statements. Political leaders will have to intervene if necessary,” Nkadimeng said.
Salga identified municipalities according to three categories: functional, challenged and dysfunctional. Most municipalities fall under the functional and challenged categories, and Salga’s role was to make all municipalities to be functional.
