The Democratic Alliance (DA) calls on the Mpumalanga provincial government to intervene and help municipalities like eMalahleni and Msukaligwa as they are financially distressed and not in a position to deliver proper services to residents.
As revealed in the 2019/2020 Auditor–General’s report, both local municipalities of eMalahleni and Msukaligwa are facing deepening financial crises which makes it difficult for them to provide services to residents.
In the 2019/2020 audit of eMalahleni, the AG noted that the municipality incurred a deficit of R549 823 601 and also that the current liabilities exceeded the municipality’s current assets by R1 319 459 449. The DA finds it extremely concerning that the financial position of this municipality was allowed to worsen over the years, and that the financial crisis was left to gain momentum without hands on intervention from this provincial government.
Since 2016, the DA has been requesting that they are placed under administration, to no avail. The Eskom debt in eMalahleni increased from R1 billion at the end of December 2016, to being the R5 billion it is today. This exponential increase can never be justified as deserving residents are robbed of basic services by interest which is generated on this overdue account.
Furthermore, the Section 71 Report for May 2021 revealed that the outstanding debtors for eMalahleni totaled R5.9 billion – money that would avert the financial crisis and improve the lives of all of the residents if the municipality was able to recover from the sale of services.
In Msukaligwa, the AG noted that this local municipality incurred a net loss of R76 348 177 during the financial year 2019/2020, and also that the municipality’s current liabilities exceeded their current assets by R923 548 805.
A municipality which is in financial distress can never be in a position to deliver services to its residents. The DA will write to the MEC of CoGTA, Busisiwe Shiba, asking her to intervene and help these municipalities fix their dismal financial status so that they can be in a better state to provide proper services to residents.