CAPE TOWN– The National Treasury, in a briefinf to the Parliamentary Committee on Appropriations here, has revealed that South Africa’s municipalities owe creditors just over 41 billion Rand (about 3.44 billion US dollars) as at the end of last month.
The Treasury told members of the committee here Thursday that the municipalities were struggling to pay their bills and added that it would introduce a Contract Management system this year to assist municipalities to limit non-core priority spending.
There will also be a system to reduce unfunded mandates.
While the municipalities are swimming in debt, it has also emerged that national government departments owe the local authorities just under 3.0 billion Rand. Provincial governments are not too far behind, owing 3.7 billion Rand.
The Treasury said some of the debt is caused by structural and constitutional impediments, like in the situation surrounding State-owned national power utility Eskom.
The problem is far wider than Eskom and the water boards alone; Government is indicating that one of our key priorities is job creation,” said Treasury’s chief director for local government analysis, Jan Hattingh.
“That those small medium micro enterprises that deal with municipalities do not get paid within 30 days and actually the same government if you’re honest is actually destroying the jobs that we actually want to facilitate.”
Source: NAM NEWS NETWORK