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Gauteng finance MEC Nkululeko Dunga has expressed concern about rising intergovernmental debt and how it places pressure and structural risk on the province and local government.
The provincial debt owed to municipalities stood at R2.64bn, while municipalities themselves owed the province R2.5bn as of March 2026.
He described this situation as untenable: “The reality is that this situation cannot continue indefinitely through payment arrangements, debt rollovers and administrative interventions that merely postpone the crisis for future generations to confront.”
The finance boss called for political leadership to intervene across all three spheres of government to resolve the crisis.
“National, provincial and local government must take collective responsibility to resolve these matters decisively and honestly.”
This follows correspondence from finance minister Enoch Godongwana indicating an intention to withhold portions of the provincial equitable share relating to intergovernmental debt obligations.
These are said to amount to R1.9bn, including more than R808m outstanding for more than one year.
Dunga disclosed that he had instructed the provincial treasury to prepare a comprehensive response to Godongwana’s concerns.
“We have already begun engagements to explore constructive mechanisms to resolve debts owed between provinces and municipalities through co-operative engagement and sustainable intergovernmental financial arrangements.”
He warned that should the National Treasury withhold funds as threatened, it will place additional pressure on an already constrained provincial fiscus.
“This could potentially affect the pace of service delivery and infrastructure commitments. We believe that continued intergovernmental engagement between the affected spheres of government would provide a more constructive platform to address these matters collectively.”
The finance MEC called for the close monitoring of the escalating Eskom and Rand Water debt crises facing municipalities. He said possible leakages, billing discrepancies and under-reporting practices within municipal financial systems were worsening the problem.
Municipalities owe billions
In addition, Dunga sounded warnings about the state of municipal coffers across the province.
He cautioned that should the current situation continue, it would place fiscal stability and developmental plans at risk.
“Municipalities continue to confront declining revenue collection, escalating creditor obligations, collapsing infrastructure maintenance, weak governance systems and persistent failures in financial reporting and compliance.”
At the end of March this year, Gauteng municipalities collectively reported outstanding debtors amounting to approximately R173.3bn, with almost 87% of this debt older than 90 days, largely owed by households.
Municipalities are also said to have reported outstanding creditors of about R34.3bn, with the figure suspected to be far higher as a result of the under-reporting of debt owed to Eskom and Rand Water.
They collectively under-reported debt owed to Eskom by about R12.7bn and debt owed to Rand Water by about R2.7bn.
According to the finance MEC, the province has also identified serious weaknesses in municipal financial reporting, as well as data integrity and intergovernmental co-operation.
“In some instances, municipalities failed to provide credible information, under-reported debt obligations, or failed to respond adequately to engagements and interventions aimed at resolving financial disputes and service delivery pressures.”
Dunga criticised the continued adoption of municipal budgets without full compliance with legislative processes.
“Several municipalities continue operating with unfunded or structurally weak budgets while infrastructure deteriorates and service delivery declines,” he said.
Internal strengthening
In addressing the financial challenges across the province and its municipalities, the finance MEC vowed to look inward and start by fixing his own house.
“In relation to Gauteng provincial treasury itself, we have found that the institution responsible for enforcing financial discipline across government must itself undergo internal strengthening, modernisation and institutional renewal.”
This process, he said, would start with the filling of 40 vacancies of critical posts across the provincial treasury.
“The modernisation of treasury systems, strengthening of internal controls, digital transformation, supplier performance monitoring and implementation of stronger governance systems will form part of the broader institutional rebuilding programme under way.”
TimesLIVE
Sisanda Mbolekwa
www.timeslive.co.za
