News Column

Committee Dismayed By Large Debt Owed to Municipalities

July 17, 2014

The Select Committee on Finance learned with dismay of a large debt owed to municipalities by provincial government, households and businesses at a briefing held at Parliament yesterday, 16 July 2014.

According to the Department of Corporative Government and Traditional Affairs (CoGTA), the aggregate municipal consumer debt is R93.4bn as of 31 May 2014. CoGTA appeared before the Committee to brief it about the state of municipalities across the country.

The Deputy Director-General of Government and Intergovernmental Relations, Mr Muthotho Sigidi, informed the Committee that the debt owed to municipalities in the 2013/14 financial year was R1bn more than in 2012/13. He also told the Committee that government's share of debtors represented 4.3 per cent (R57bn), followed by businesses at 20.7 per cent (R19bn) and other categories of debtors at 13.4 per cent (R12.5bn).

Committee Chairperson Mr Charel Jacobus de Beer advised the Department to furnish detailed information about which provincial departments owed money to municipalities. "Since the National Council of Provinces does not have a Committee on Public Accounts, it is our responsibility, together with the Appropriations Committee, to oversee the accounts of provinces and municipalities. The Department must provide us with detailed information with the names of departments so that the Committee can facilitate debt recovery," Mr de Beer said.

It also emerged during the meeting that municipalities are under-spending on the Municipal Infrastructure Grant (MIG). Mr Sigidi said the MIG expenditure over the past four financial years had been always lower than 80 per cent. Furthermore, the allocation quantum had been increasing over the years and the balance unspent had always been a concern.

Justice Molafo

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Source: AllAfrica

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