National Treasury Freezes Funds for Five Municipalities Over Unpaid Water Bills

National Treasury Freezes Funds for Five Municipalities Over Unpaid Water Bills

South Africa’s National Treasury is taking a bold stand against municipalities failing to pay their water bills, announcing plans to withhold funds from five local governments starting next month. This decisive action aims to address unpaid debts crippling the nation’s water boards and hampering service delivery.

Municipalities in the Spotlight

The municipalities affected are:

• Matjhabeng
• Kopanong
• Thabazimbi
• Merafong City
• Victor Khanye

These municipalities collectively owe billions to water boards. The Treasury confirmed that the funds, scheduled for release on December 4 and March 12, 2025, will only be disbursed once payment arrangements are in place.

Mounting Water Board Debt

The Water and Sanitation Department revealed staggering debt levels of R23.4 billion owed to water boards, with over 70% of this amount being overdue by more than four months. Key boards like Vaal Central and Magalies face financial collapse due to these unpaid dues, threatening critical infrastructure maintenance and water delivery.

• Matjhabeng and Kopanong owe a combined R7.8 billion to the Vaal Central water board.
• Thabazimbi owes R216.5 million to Magalies Water.
• Merafong City and Victor Khanye owe R1.54 billion to Rand Water.

The Long-Standing Challenge of Non-Payment

The culture of non-payment for municipal services dates back to the apartheid era, where protests against the regime included boycotts of utility payments. Unfortunately, this trend has persisted, straining municipal budgets and service delivery.

Government Interventions

To address this crisis, the National Treasury and the Water and Sanitation Department are:

• Suspending municipal funding under equitable share provisions.
• Assisting municipalities in renegotiating repayment agreements.
• Finalizing a debt write-off mechanism for municipalities that consistently pay current invoices.

Sean Phillips, Director-General of the Water and Sanitation Department, explained that this approach balances immediate accountability with long-term financial stability.

The Bigger Picture

The withheld funding highlights broader issues of governance, financial management, and service delivery across South Africa’s municipalities. Without robust intervention, the ripple effects of this crisis could disrupt water access in major urban centers, including Johannesburg.

National Treasury’s decision to withhold funds underscores the urgent need for municipalities to prioritize service payments and financial responsibility. This move, though controversial, aims to ensure sustainable water infrastructure and reliable service delivery for all South Africans.