Plans to write off municipalities’ debt pile to water boards don’t come without a price

The Department of Water and Sanitation announced this week that its discussions with the National Treasury to write off municipal debt to water boards are already at an advanced stage. However, AfriForum is of the opinion that the proposed plan is not the solution to solving the non-payment culture within municipalities. AfriForum is calling on municipalities to get their house in order instead, otherwise officials should be held personally liable for their municipalities’ arrears to water boards.

The current proposal entails that – if the selected municipalities dutifully pay off one-third of their old debt over three years, as well as pay current bills on time – the rest of their historical debt can be written off. However, it is unclear on what criteria the municipalities will be selected.

“This plan gives officials, who do not do their job and spend the municipalities’ funds as expected of them, the opportunity to evade accountability. Paying residents’ money has been misused for years and rather than devising plans to hold these guilty officials accountable, plans are being devised to get them out of a predicament – again at the expense of paying residents,” says Lambert de Klerk, manager for Environmental Affairs at AfriForum.

By June 2024, the total municipal debt to water boards amounted to R22,36 billion. This amount could instead be used to cover the backlog on the maintenance of Johannesburg Water’s infrastructure, which currently amounts to R27 billion. The problem is not just that municipalities are not paying bills, but that they have lost total control over what is happening in their areas. Municipalities’ water supply is unreliable and water worth billions of rands are lost due to water losses. Furthermore, municipalities also have no administrative capacity to deliver something basic like bills with correct readings, which is why they also struggle to collect debts.

“Many municipalities no longer have the capacity and expertise to deliver services and be paid for it. The possibility that the private sector will have to start delivering and managing municipal services in collaboration with government departments is increasing. This debt-write-off mechanism rewards poor financial management rather than completely curbing it,” concludes De Klerk.