Councillors and ratepayers in eThekwini are demanding more decisive action against government departments that owe the municipality billions of rand. These demands arose amid concerns that state structures treat debts with excessive leniency, while ordinary residents face service disconnections for much smaller amounts.
The calls came after the publication of the municipality's consumer debt report. According to this report, total consumer debt increased by almost R2 billion in the last three months and is approaching the R50 billion mark, with the majority of this debt belonging to households.
The report also highlights the growing indebtedness of government departments and state-owned enterprises. It records total government and parastatal debt at R2.6 billion. It was noted that one government department's debt grew by R700 million between May and July, rising from R1.9 billion to R2.6 billion. Furthermore, one parastatal owes the municipality over R500 million.
Of the total debt, approximately R1.6 billion is attributed to provincial government departments, and the national government owes about R101 million. Ingonyama Trust owes the municipality R354 million. The report also identified outstanding debt related to the Department of Education for Section 21 schools, amounting to R331.5 million, of which about R39.4 million is current debt and R292.1 million is overdue debt.
According to the report, the Department of Education signed a debt acknowledgment and made an initial payment of R83 million. The remaining amount is to be paid within 16 months, with payments starting on May 1, 2026. The municipality stated that the department has made a second payment and is adhering to this agreement.
The report warns that government debt puts pressure on the municipality's cash flow, service provision, and financial sustainability. It states that 'effective credit control measures, consistent debt collection, and strict adherence to municipal lending and debt collection policies are necessary to improve revenue collection and reduce outstanding debts.' It also recommends continuing cooperation between municipal departments and government institutions, as well as regularly monitoring debt management strategies.
IFP Councillor Mdu Nkosi stated that government departments should be treated the same way as residents who do not pay their municipal bills. Nkosi noted: 'It is regrettable that we all speak with one voice and claim that government organizations should pay for services, while they themselves do not pay for services.' He added that the municipality borrows money while large sums remain unpaid. 'If government departments paid their bills, we wouldn't even have to borrow money,' he said. 'The council must be firm when dealing with government departments and organizations. We cannot allow a resident to be disconnected for a small amount while government departments owe billions.'
DA Councillor Andre Beetge insisted on accountability across all spheres of government. He stated that 'the municipality cannot expect ordinary residents to pay their bills, which often leads to disconnections, while government departments allow themselves to accumulate billions in unpaid debt.'
Beetge called for binding payment agreements with major government debtors, clear repayment schedules, monthly monitoring, and consequences for non-compliance. Beetge emphasized: 'Where legally permitted and where critical services are not jeopardized, the municipality must apply its credit control measures, including disconnections. We understand that hospitals, schools, and other vital facilities cannot simply lose critical services. However, this cannot be an excuse for endless debt accumulation.' He also indicated that alternative enforcement mechanisms, including intergovernmental escalation, litigation, and engagement with the National Treasury, should be used.
Ish Pradlah from the eThekwini Ratepayers and Residents Association stated that government departments with arrears should be treated the same as other municipal consumers. Ingonyama Trust did not respond to requests for comment. The Department of Education reported that it has an agreement with the municipality regarding this matter. The municipality stated that it is working on strategies to recover outstanding debts and reduce consumer arrears.
The Premier's KZN office reported that the Premier has prioritized this issue across the province. Since taking office, he has ensured payments to municipalities, and the debt owed to municipalities by government departments is managed through a structured approach divided into three levels: Uncontested Debt: it is settled or a payment plan is established. Disputed Debt: it has been transferred to KZN COGTA to assist municipalities in verification and providing accurate data. National Government Debt: it has been transferred to the National Treasury for resolution.