Political parties express alarm over eThekwini Municipality's R41 billion debt crisis

External debt collectors (EDC) contracted by the eThekwini municipality to collect R11.9 billion have managed to collect R610 million, drawing mixed reactions from political parties. 

In a report presented at a council meeting on Tuesday, the total debtors stood at R41bn, with household debt making up the bulk of the debt at R28bn, while commercial debt includes business accounts, which amount to R8.4bn. The municipality stated provincial and government departments owe R1.9bn. 

As a result of EDC initiatives, 65 summons to the value of R21m were served, and 2031 letters of final demand to the value of R516m were sent out to customers.

According to the debt collection report for August 2025, the increase and slow improvements in the debtor’s book are attributed to:

• Poverty and unemployment
• Schools are not paying for services 
•  Inadequate disconnection of both water and electricity/follow-ups/investigation services for non-payment
• Customers tampering with meters results in loss of income.

The municipality stated that they have developed a short-term and long-term debt collection strategy, which includes, among others, targeted collection by customer group, meetings with key stakeholders such as government, businesses, parastatals, bulk users, as well as conducting an in-depth analysis of the debtor’s book.

Alicia Kissoon, ward 23 DA councillor, said the collection rate slipped to 90% in August, down from 94% in July, translating into a significant loss of income. She said every cent the city fails to collect is a cent taken from repairing pipes, fixing roads, and keeping the lights on. She agreed that poverty and unemployment were making it difficult for residents to pay. 

“It is wrong to punish the very residents who are already paying while arrears balloon and billing failures go unaddressed. This is not fiscal prudence; it is simply squeezing the honest ratepayer because we are unable to enforce against those who do not pay. But the solution is not to play politics with people’s hardship,” she said. 

Kissoon suggested that residents deserve honesty and action and called on the municipality to fix billing accuracy, which includes unread and faulty meters, unlinked accounts, and endless estimates that are undermining the credibility of the system.

Patrick Pillay, leader of the Democratic Liberal Congress (DLC), called for the municipality to implement the debt relief program for an additional four months, which he said proved to be a win-win outcome for the city in bringing in much-needed revenue. He said this also provided financial relief for the ratepayer. 

“There seems to be no end to outstanding government debt. It is about time that these matters are addressed,” he said. 

Dr Jonathan Annipen, IFP councillor, laid the blame for the escalating household debt on the municipal administration because he felt they failed to perform their functions diligently on poor and vulnerable households, who are making every effort to comply, and are being subjected to illegal disconnections. He called for a moratorium on disconnections for customers where agreements exist until such an audit is completed and the systems reconciled.

“The prepaid debt recovery system has been in operation since 2022. Yet, three years later, the systems between electricity and billing remain unmerged. This results in the revenue management system not being reconciled with actual payments.

“This has created administrative chaos that unfairly punishes people. The indigent support process is all but crippled. Poor work ethic, weak management, and a lack of manpower have stalled this essential service,” he said. 

zainul.dawood@inl.co.za