By Charles Molele
Finance Minister Enoch Godongwana has announced a series of initiatives aimed at alleviating financial pressures and restoring stability in local government, including the Eskom Municipal Debt Relief Programme.
Godongwana tabled the Medium-Term Budget Policy Statement at the National Assembly in Cape Town on Wednesday.
At the moment, 50 of the country’s 257 municipalities have implemented financial recovery plans, while three – Mangaung, Enoch Mgijima, and Lekwa – are under national intervention due to governance and financial failures.
Godongwana acknowledged that, given the scale of the challenges, it was not feasible for the national government to intervene in all municipalities simultaneously.
“To systematically resolve these local government failures, several initiatives are underway,” he said.
“The Eskom Municipal Debt Relief Programme is one of these key interventions, designed to reduce the debt burden on municipalities and strengthen their capacity to provide essential services.”
Since February, when the relief programme was last reviewed, approximately 70 municipalities that applied for debt relief have had their applications approved, a significant step forward in the government’s efforts to stabilize local governance and ensure consistent service delivery across communities.
“Between March and August 2024, compliance with relief conditions by municipalities improved from 55 per cent to 76 per cent, aided by the National Treasury, Provincial Treasuries, and the Municipal Finance Improvement Programme,” said Godongwana.
Rand West City is the first municipality to benefit from a one-third debt write-off and this follows its substantial achievement of the debt-relief conditions for the first 12-month cycle.
More municipalities stand to benefit from this write-off of debt if they comply with the conditions of the programme.
“We implore provincial and national departments owing municipalities to pay their dues. This will enable municipalities to pay waterboards and Eskom, so that utilities can deliver these services to citizens,” said Godongwana.
With regards to metro trading reforms, Godongwana announced that almost 60 per cent of economic activity was concentrated in the eight metropolitan municipalities that are home to six out of ten people in South Africa.
To turn things around in municipal service provision, the reforms in trading services focuses on financial, institutional and management changes in metros, said Godongwana.
“The goal is to improve outcomes and enable them to generate surpluses to increase investment in infrastructure,” he said.
“Our efforts are supportive of the intent of the White Paper on Local Government by the Department of Cooperative Governance to reimagine municipalities as transformative vehicles equipped to respond to the needs of residents.”
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