South Africa’s Towns Struggle to Collect $14.8 Billion Owed

(Bloomberg) -- Debt owed to South African towns and cities almost doubled over the past five years, weighing on municipal finances and increasing the risk that the supply of basic services such as water and electricity will be disrupted.

Most Read from Bloomberg

• Amazon Closes, Abandons Plans for Dozens of US Warehouses

• NASA’s Artemis Rocket Is a Gigantic Waste of Money

• Bed Bath & Beyond Says CFO Died in Fall From NYC Building

• Germany to Make ‘Billions’ Off Energy Firm Levy, Scholz Says

• Cyrus Mistry, Heir to One of India’s Oldest Fortunes, Dies at 54

Consumers owed municipalities 255.4 billion rand ($14.8 billion) by the end the financial year through June 30, compared with 232.8 billion a year earlier, according to data the National Treasury published on Friday. Households account for 71% of this. Of the outstanding debt, 86% is older than 90 days and may therefore not be realistically collectible.

South African city councils struggle to collect payments for services from consumers and in turn can’t pay their suppliers. That’s led to state-owned power utility Eskom Holdings SOC Ltd. threatening to cut off electricity until it’s paid, including a warning last week to the City of Tshwane, which includes the nation’s capital, Pretoria, that it will be disconnected.

Municipalities owed their creditors 89.7 billion rand by June 30, up from 81.1 billion at the end of March, according to the Treasury. Town councils’ debt to Eskom alone was 49.1 billion rand by the end of July, Deputy President David Mabuza said last month.

Most Read from Bloomberg Businessweek

• Women Who Stay Single and Don’t Have Kids Are Getting Richer

• Mark Zuckerberg’s Metaverse Pitch Is Falling Flat

• A New Contaminant Found in Popular Drugs Could Cost Big Pharma Millions

• Russia’s Conspiracy-Theory Factory Is Swaying a Brand-New Audience

• The Anti-ESG Crusader Who Wants to Pick a Fight With BlackRock

©2022 Bloomberg L.P.