South Africa's municipal debt to Eskom has surged by R12 billion over the past three months, according to Electricity Minister Kgosientsho Ramokgopa. This increase brings the total amount owed to the struggling state-owned utility to an unprecedented R90 billion.
Minister Ramokgopa revealed that municipal debt is climbing at an average rate of R3 billion per month, with many local governments unable to meet their financial obligations. The mounting debt has intensified Eskom's financial woes as the utility grapples with liquidity challenges and the country’s ongoing energy crisis.
Speaking in Johannesburg on Monday, Ramokgopa attributed the ballooning debt partly to South Africa's underperforming economy. He also highlighted the impact of administrative and operational issues at the municipal level, pointing to a "haemorrhaging of skills" in local governments and inefficiencies in billing and credit control processes.
"Local municipalities face significant challenges, including inaccurate billing, ineffective credit control, and a shrinking revenue base," Ramokgopa said. These issues, he added, have contributed to the inability of municipalities to meet their obligations, exacerbating the financial strain on Eskom.
The utility’s financial stability remains a critical concern as the national government works to stabilize South Africa's power supply and support struggling municipalities.