According to a report, national government departments owe municipalities R4.8 billion. In addition to this, private households and businesses owe R104 billion. This is according to the Department for Co-operative Governance and Traditional Affairs (CoGTA).
According to Tozi Faba, deputy director general at CoGTA, the department has launched a campaign which aims to encourage national departments to adopt a culture of paying.
Faba reportedly told journalists: “There is no particular reason that one can give [for not paying] except to say here and there they [the departments] are just defaulting and from time to time they will query the amounts.”
At the governance and administration cluster media briefing on Sunday, it was announced that National Treasury has issued letters to all of the national government departments who have funds owing to municipalities. In addition, “letters have been issued to provincial treasuries for provincial debt owed to municipalities.”
Municipalities owing funds
While the municipalities has funds owed to them, they in turn owe funds to service providers, such as Eskom and the National Water Board. These outstanding funds led to the municipalities’ equitable shares being withheld earlier this year.
According to the division of revenue bill, equitable share payments, are a “municipality’s share of local government’s equitable share of revenue raised nationally.”
It was thought that this would affect 59 municipalities, and about 1.3 million households. “Regarding the withholding of the Equitable Share tranche for March 2015, National Treasury met with 38 of the 59 municipalities to date and 54 municipalities received their full tranche of the Equitable Share. Three municipalities received part of the Equitable Share tranche and two (Renosterberg and Ngwathe) did not receive any funds. Of the total R2.08 billion equitable share withheld, R2.02 billion has been released; 48 out of 51 municipalities have signed Eskom agreements, and 12 out of 14 municipalities have signed water board agreements,” revealed the CoGTA at the media briefing.