COGTA PORTFOLIO COMMITTEE CHAIRPERSON RAISES ALARM OVER KZN MUNICIPALITIES’ FINANCES

Media Statement
For Immediate Release
COGTA PORTFOLIO COMMITTEE CHAIRPERSON RAISES ALARM OVER KZN MUNICIPALITIES’ FINANCES

The latest Section 71 fourth quarter report on municipal finances has confirmed what many communities in KwaZulu-Natal already know, while there are areas of progress, too many municipalities remain in deep financial trouble.

Municipalities collected R99.3 billion, equal to 98.6% of adjusted budgets. On the surface this appears strong, but the reality is stark: municipalities are still burdened by R67.1 billion in unpaid debt, of which 84% is overdue by more than 90 days. At the same time, they owe R9.3 billion to creditors, with more than half of that amount also overdue — mainly to Eskom and water boards. These arrears threaten electricity and water supply across the province.

Even more worrying is the under-expenditure of R9.9 billion. These are funds that were budgeted to build roads, repair infrastructure, and improve basic services — but they remain unspent due to delays, poor planning, and weak capacity.

The report also highlights the problem of unauthorised, irregular, fruitless and wasteful expenditure (UIFWE). In the second and third quarters alone, municipalities detected more than R132 million in UIFWE. Detecting it is one thing, but the failure to prevent it shows that too many municipalities still lack proper financial controls. National Treasury has warned that if this continues, it may use its constitutional powers under Section 216(2) to withhold funds from repeat offenders — a move that would have direct consequences for service delivery.

As the CoGTA Portfolio Committee, we are clear: municipalities must urgently improve debt collection, honour their creditor payments, speed up infrastructure spending, and act firmly against financial misconduct. Provincial and National Treasury can provide support, but accountability lies squarely with municipal leaders.

The time for excuses has passed. Our municipalities are the frontline of service
delivery — and they must get their finances in order before more drastic action is taken.
ISSUED BY THE COMMUNICATION’S UNIT ON BEHALF OF COGTA PORTFOLIO COMMITTEE CHAIRPERSON, HONOURABLE MARLAINE NAIR

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