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South Africa’s municipalities owed electricity utility Eskom R94-billion at the end of January 2025, according to Eskom.
Eskom provides bulk electricity to municipalities, which the municipalities then distribute to customers. Municipalities, which have battled with financial management problems combined with a culture of customers not paying for services, fail to collect payment from customers and, in turn, they fail to pay Eskom, resulting in a debt spiral.
In 2023, the National Treasury implement a municipal debt-relief programme that made provision for Eskom to write-off the debt, interest and penalties accrued by a defaulting municipality over a three-year period, as long as the municipality met strict conditions.
Of the 71 municipalities that are part of the debt-relief programme, 47 have consistently defaulted, according to the Treasury’s 2025 National Budget Review published in March 2025. Three have received final warnings and face being removed from the debt-relief programme. On a positive note, 11 municipalities have had one-third of their debt written off because they met the programme’s conditions for the first year, the Treasury reports.
Eskom provides bulk electricity to municipalities, which the municipalities then distribute to customers. Municipalities, which have battled with financial management problems combined with a culture of customers not paying for services, fail to collect payment from customers and, in turn, they fail to pay Eskom, resulting in a debt spiral.
In 2023, the National Treasury implement a municipal debt-relief programme that made provision for Eskom to write-off the debt, interest and penalties accrued by a defaulting municipality over a three-year period, as long as the municipality met strict conditions.
Of the 71 municipalities that are part of the debt-relief programme, 47 have consistently defaulted, according to the Treasury’s 2025 National Budget Review published in March 2025. Three have received final warnings and face being removed from the debt-relief programme. On a positive note, 11 municipalities have had one-third of their debt written off because they met the programme’s conditions for the first year, the Treasury reports.