The DA has written to Mpumalanga CoGTA MEC, Busisiwe Shiba, calling her to intervene with a strategy that will help local municipalities as most of them, if not all 17, are running at an operating deficit and are unable to pay their creditors. They are almost bankrupt.
The following local municipalities: the City of Mbombela, Emalahleni, Thaba Chweu and Msukaligwa are confirmed to be operating at a Liquidity Ratio of under 1 (one) – which means that they are unable to settle their current and short-term obligations.
In recent times, the Auditor General (AG) raised red flags over the finances of the above-mentioned municipalities and their ability to continue operating as their current liabilities exceeded their current assets.
This is how they performed for the 2019/2020 financial year:
* Mbombela: the AG expressed concern about the municipality’s future as once again the current liabilities exceeded the current assets by R1 496 billion. The financial distress which this municipality is in further fostered the non-delivery of services as the municipality continues to struggle to pay its contractors and service providers for projects and services rendered.
* Thaba Chweu: incurred a net loss of R 165 055 564 and the current liabilities increased by 24%.
* eMalahleni: the AG’s report for eMalahleni reiterated the effects of the extremely high debt to Eskom as the municipality incurred a deficit of R549 823 601 and the current liabilities exceeded the current assets by R1 319 459 449.
* Msukaligwa local municipality also incurred a net loss of R76 348 177 during the 2019/2020 financial year, and the current liabilities exceeded their assets by R923 548 805.
Over the past few years, almost all the 17 local municipalities in the province owe billions because of poor financial management practices. They always find themselves on Eskom, Silulumanzi, and Rand Water’s disconnection list as they are unable to generate revenue – which has resulted in increasing debtor accounts.
Under the ANC, Mpumalanga municipalities have been plagued by a billing and revenue collection crisis for several years, which has led to billions of rands worth of lost or written-off revenue.
A DA government would conduct a skills audit for all civil servants to ensure that only qualified and ethical people are in a position to handle municipal finances.
The DA is making a difference where it governs. The DA can make a difference in Mpumalanga.