Sihle Mavuso
A 37-page report by the KwaZulu-Natal Provincial Treasury has painted a grim picture of the finances of the province’s 54 municipalities, including eThekwini Metro.
The report shows that 20 municipalities have been flagged as meeting the criteria for “serious financial problems”, with uMuziwabantu Local Municipality listed first, followed by Ugu District Municipality.
Also on the list are Mpofana, Msunduzi, uThukela, eNdumeni, uMzinyathi, Newcastle, eMadlangeni, Dannhauser, Amajuba, eDumbe, AbaQulusi, Nongoma, Ulundi, Zululand, Jozini, Inkosi uMtubatuba, uMkhanyakude, and Mthonjaneni.
However, the Treasury report cautions that the figures are based on unaudited municipal data, and that reporting errors, unreliable data strings, mSCOA problems and financial-system weaknesses remain a concern in some municipalities.
It said some municipalities initially appeared to meet the criteria for serious financial problems, but were later found not to be financially distressed after further scrutiny.
The report found that the listed municipalities were struggling to meet their financial obligations as they became due, with expenditure in some cases higher than the money available in their bank accounts.
The report, compiled at the end of March this year, was tabled by KwaZulu-Natal Finance MEC Francois Rodgers before the provincial legislature in Pietermaritzburg this week.
It also paints a troubling picture of municipalities owing Eskom billions of rand, with Newcastle Local Municipality, led by the IFP, carrying the largest outstanding bulk electricity debt. It is followed by Msunduzi Local Municipality, where the ANC holds the mayoralty.
“Of the bulk electricity outstanding creditors balance of R3.7 billion, R2.1 billion or 56.8 percent was in the over 90 Days category.
“This was due to the fact that the Newcastle, Msunduzi, eNdumeni, Ulundi, AbaQulusi, Mthonjaneni, eMadlangeni and eDumbe Local Municipalities reported amounts in the Over 90 days category owing to Eskom of R2.1 billion, R540.3 million, R530.3 million, R374.4 million, R345.6 million, R283 million, R58.4 million, R21 million and R54 000 respectively for unpaid electricity.
“Furthermore, bulk electricity is understated as the Mpofana Local Municipality reported no amounts owed for Bulk electricity whilst the MFMA Section 41 report for March 2026 reflects an amount owed of R666.9 million in the Over 90 Days category,” the report said.
Some municipalities also owe millions to water boards for bulk water supplied to them for distribution to households and businesses, further weakening their finances.
“Of the bulk water outstanding Creditors balance of R2.7 billion, R2.2 billion or 80.6 percent was in the over 90 Days category. This was mainly due to the fact that the Msunduzi Local Municipality (R1.2 billion), the Ugu District Municipality (R697.5 million), the Newcastle Local Municipality (R256.9 million), the Amajuba District Municipality (R73 million), the Zululand District Municipality (R14.7 million) and the eDumbe Local Municipality (R449 000) reported amounts owing to the Water Boards for unpaid bulk water in the Over 90 Days category.”
The report also shows that some municipalities are struggling to spend on capital expenditure, delaying critical projects and infrastructure delivery.
“The uMhlabuyalingana Local Municipality attributed the low Capital Expenditure to delays in the implementation of projects amongst others to the late approval of rollovers of the 2024/25 Municipal Disaster Recovery Grant amounting to R3.7 million and allocation and receipt of R20 million relating to the Municipal Disaster Grant in February 2026.
“The low expenditure reported by the eThekwini Metro against the Adjusted Budget is mainly attributed to delays in the implementation of projects by contracted service providers,” reads the report.
Another troubling finding is that municipalities are owed billions of rand by ratepayers, businesses and government entities, with the debt continuing to balloon.
“The total debt owed to municipalities at the end of the third quarter of the 2025/26 financial year was R74.3 billion which represents an increase of R2.1 billion or 3 percent from R72.2 billion reported by municipalities as at the end of the second quarter of the 2025/26 financial year.
“At the end of the third quarter of the 2025/26 financial year, a substantial amount of debt totalling R64.1 billion or 86.3 percent was outstanding in the Over 90 Days category which represents an increase of R2.3 billion or 3.7 percent from R61.8 billion reported in the same age category as at the end of the second quarter of the 2025/26 financial year.”
The report indicated that some of these debts may still have to be written off as they may have arisen from the incorrect billing of indigent customers, among other issues.
However, the Treasury report cautions that some of the municipal financial information is unaudited and that data quality problems, financial system weaknesses and reporting errors remain a concern in some municipalities.
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