The blame for Free State municipalities’ staggering debt levels can only be laid at the door of the ANC for its decades of financial mismanagement, poor policy and misguided priorities.
Meanwhile, residents have to shell out even more for municipal services that are simply not delivered.
Based on the Free State Treasury’s briefing of the Free State Legislature, there seems to be no end to the debt crisis in which municipalities have been mired for years.
The Treasury reports that debt owed to municipalities currently exceeds R45 billion. To put this into perspective, this amount is equivalent to the entire budget of the Free State provincial government.
Municipalities’ collection rate for utility fees currently averages only 55%, well below the target of 95%.
In addition, municipalities’ own debt is also out of control, amounting to R36 billion. This includes, among other things, debt owed to Eskom (R28,4 billion) and water debt (R9,9 billion).
Moreover, municipalities are failing to utilise grants, especially those for infrastructure development. Municipalities failed to spend as much as 29,5%, or R2,7 billion, earmarked for service delivery projects.
The only way to resolve the debt crisis is to vote the ANC out of municipal councils in next year’s elections.
Article by: Mr Armand Cloete
Source: Freedom Front Plus
