Business Maverick
South Africa’s Towns Struggle to Collect $14.8 Billion Owed
Commercial buildings and residential apartment blocks on the skyline of Pretoria, South Africa, on Friday, Feb. 18, 2022. South Africa's economy showed surprising resilience through 2021, but the luster has started to fade, with Bloomberg Intelligence forecasting GDP growth of less than 2% for 2022. Photographer: Waldo Swiegers/Bloomberg
Debt owed to South African towns and cities almost doubled over the past five years, weighing on municipal finances and increasing the risk that the supply of basic services such as water and electricity will be disrupted.
South African city councils struggle to collect payments for services from consumers and in turn can’t pay their suppliers. That’s led to state-owned power utility Eskom Holdings SOC Ltd. threatening to cut off electricity until it’s paid, including a warning last week to the City of Tshwane, which includes the nation’s capital, Pretoria, that it will be disconnected.
Municipalities owed their creditors 89.7 billion rand by June 30, up from 81.1 billion at the end of March, according to the Treasury. Town councils’ debt to Eskom alone was 49.1 billion rand by the end of July, Deputy President David Mabuza said last month.
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