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KZN owed R8.4 billion by residents

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17 Aug 2011

Municipalities in KwaZulu-Natal are owed R8.4 billion by ratepayers and residents living in cities and towns throughout the province according to a report by the provincial Treasury.

The report contains unaudited information provided by 61 local government structures. It says that most of the money is owed by residents who have failed to pay property rates and warns that some of the debts will probably have to be written off.

The provincial Treasury says that this highlights the fact that there is a dire need for effective and efficient billing systems, accurate financial reporting and adequate planning for infrastructure-related funds for municipalities.

The report points out that nearly 67% of the debt in KwaZulu-Natal is owed by eThekwini (R4.8 billion), Msunduzi (R743 million) and uMhlatuze (R112 million).

Three districts in the province, Umgungundlovu (Msunduzi and uMngeni), Amajuba (Newcastle) and uThukela (Bergville, Ladysmith and Estcourt) have significantly high debt levels and between them are owed R2.2 billion.

The report says that at least 80% of municipal debt is older than 90-days and the amounts owed may not be recovered and will have to be written off. Outstanding property rates account for 34.4% of the total and unpaid water charges are the second-highest category.

Provincial MEC for Finance, Ina Cronje warned that the credibility and accuracy of the information provided by municipalities could be questioned and urged local councils to recruit and train staff who specialise in debt recovery and capital spending.

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