The City of Ekurhuleni, South Africa’s manufacturing heartland, has written off R2.4bn in its R35bn debtors’ book as households struggle to honour their municipal accounts due to the rising cost of living.
Jongizizwe Dlabathi, finance mayoral committee member (MMC) of Ekurhuleni, which has a budget of R65.5bn for 2025/26, said the R35bn owed to the city is as a result of an “entrenched culture of nonpayment”, which has spurred the municipality to embark on an education and awareness campaign “to make communities understand the importance of paying for municipal services”.
“By the end of the second quarter of the current financial year, our debtors’ book was sitting at R35bn and a greater part of that was composed of money owed by households for municipal rates, water, refuse collection, and so on,” Dlabathi said.
“After exhausting all efforts to collect what was owed to the city, we came to a realisation that some of the overdue amount would be impractical to collect hence we decided to write off the R2.4bn owed, largely, by indigent households.”
The metro would continue chasing after those behind with payments on their municipal accounts, and some of the strategies would include “switching off their prepaid [electricity] meters to compel them to pay”.
“We want to do away with the culture of nonpayment. That is why we have a debt rehabilitation and incentive scheme for debt that is 12 months and above. We assess it and if the application is approved, we write off 75% and the customer enters into an agreement to pay the remaining 25% within 36 months.”
DA Ekurhuleni caucus leader Tania Campbell could not immediately be reached for comment. Ekurhuleni, with the Mangaung metro saw Moody’s withdrawing its ratings recently in a move that was described as likely to unsettle investors who rely on agencies’ ratings to make informed decisions.
Moody’s, one of the world’s top three ratings agencies alongside S&P and Fitch, cited “business reasons” for its decision to no longer rate the two metros. Ratings agencies usually withdraw ratings for business reasons when they lack sufficient information to maintain the rating.
Last week the metro council passed its adjusted budget for 2025/26 aimed at “directly benefiting the residents of Ekurhuleni”, according to executive mayor Nkosindiphile Xhakaza.
“At a consolidated level, the city’s operating revenue increases by R829.9m to R66.325bn, while operating expenditure increases by R784.8m to R65.629bn. The operating surplus improves by R45.1m to R695.4m. At the same time, the total capital budget rises by R158.26m, from R3.197bn to R3.355bn,” Xhakaza said.
“Most importantly for residents, the adjustment budget significantly strengthens the city’s repairs and maintenance effort. An additional R239m has been allocated, increasing the repairs and maintenance budget from R3.865bn to R4.379bn.”
Xhakaza said the approval of the adjusted budget is a “clear demonstration that Ekurhuleni is moving with purpose and stability.
“This council decision gives effect to our renewal agenda by directing resources where they are needed most: repairs and maintenance, ageing infrastructure, frontline service delivery, ICT modernisation and operational recovery.”
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