Finance

a) In terms of Section 41(2) of the Municipal Finance Management Act (Act 56 of 2003), Eskom and Water Boards must report monthly to National Treasury on any arrears owed by municipalities. Provincial Treasury therefore cannot respond comprehensively to this question; and therefore, kindly requests the Member to please request respective information from National Treasury.
(b)(i) Provincial Treasury assesses the tabled budget of each municipality in the province. This assessment includes evaluating whether the budget, as a whole, is funded and whether the tariffs levied for each service are sufficient to cover the municipalities costs in delivering that service. If both conditions are met, then the Municipality should be in a position to be able to pay their bulk costs. Provincial Treasury then monitors budget implementation monthly (through Section 71 of the Municipal Finance Management Act (Act 56 of 2003)) to ensure that municipalities adhere to their planned budget. If Provincial Treasury becomes aware that a Municipality is in arrears to a bulk provider, then Provincial Treasury will assist them to negotiate a payment arrangement and put in place measures to address the reasons for their
non-payment. If the Municipality fails to adhere to such an agreement, the Provincial Treasury will assess whether the Municipality’s arrears meet the requirements for a mandatory intervention, and if necessary, will intervene in terms of section 139(5) of the Constitution.
(ii) Four Municipalities in the Western Cape qualified to participate in the Municipal Debt Relief Programme announced by the Minister of Finance in February 2023. After the first year of implementation, Matzikama Local Municipality qualified for a R37.7 million debt write-off, Cederberg Local Municipality for R15 million, Kannaland Local Municipality for R14.8 million, and Beaufort West Local Municipality for R25.6 million. These amounts represent one third of their total debts owed to Eskom and afford the municipalities fiscal space to re-direct their resources to service delivery. As municipalities continue to honour their commitments to Eskom, they will be eligible to have the remaining two thirds of their debt written off over the next two years. The Western Cape Government will continue to work with these municipalities to assist them in improving their financial position.