The graphic below gives a breakdown of the kinds of debt that are supposedly a source of income to municipalities. Water, other debtors, and property rates made up the bulk of debt at 28%, 23%, and 21% respectively. Electricity, refuse removal, and sanitation, made up the remaining debt at 14%, 7%, and 7% respectively.

 A breakdown of the debt by type of debtor shows that most of the debt was owed by households at 56%. Business accounted for 12% of debt and government for 5%. The remaining 27% was not allocated to any debtor. This breakdown is illustrated in the graphic below.

 At the end of the 2009/10 financial year, 79% of all debt was older than 90 days. Also, less than 3% of all debt was written off over the course of the year and a large proportion was not recovered immediately and remained on the books. This suggests that municipalities stood almost no chance of recovering the debt.

The inability to collect debt is not the only challenge facing municipalities. In August the National Treasury reported that municipalities had under-spent their budgets by R18.9 billion in the 2009/10 financial year. The aggregate under-spending was 8.9% of the total municipal budget, slightly less than the previous financial year’s underspending at 9.1%.

Municipalities’ failure to collect money owed to them and to spend their budgets means that service delivery is severely compromised. So although municipalities may have money to deliver services they do not spend it all nor do they ensure that they recover what is owed to them.

-Nachi Majoe