Date: 19th September 2024, Thursday
Author: Quinz Atdah Qeqe
Country: South Africa
Source: Getty Images
SUMMARY
The local municipality of Emfuleni in the Gauteng province of South Africa has over the years experienced numerous financial challenges halting its ability to pay Eskom – the state owned enterprise(SOE) which supplies bulk electricity throughout South Africa. Eskom has recently attached four of the Emfuleni municipality’s bank accounts, this in Eskom’s attempt to collect an over R8 billion debt in electricity bills owed to it by the municipality (Sicetsha, 2024). Political party the Democratic Alliance(DA) has warned that the attachment on the municipality's banks could further fuel the current service delivery crisis experienced within the municipality, plummeting communities into complete social and environmental chaos (Nondywana, 2024). The Emfuleni Municipal Mayoral Committee(MMC) for Finance Hassan Mako has ascribed the high unemployment in the municipality as the leading cause of the backlog in payments to Eskom (Nkadimeng, 2024). With the municipality's accounts haven been attached by Eskom, fears of the implications of this on the provision of municipal service delivery has stricken communities in the Emfuleni Municipality.
BACKGROUND
In 2018, the local municipality of Emfuleni in Gauteng, South Africa undertook a Financial Recovery Plan(FRP) under section 144 of the Municipal Financial Management Act(MFMA), this after it was established that the municipality could not effectively collect revenue which ultimately impacted on its ability to pay for services rendered to it by service providers such as Eskom (Mashale, 2024).
In light of its financial challenges, in 2021 to 2023 the municipality was placed under administration by the Gauteng provincial government under chapter 6 section 139 of the constitution. This aimed at assisting the municipality in achieving its administrative, operational and financial obligations. Despite this intervention by the provincial government the municipality continued to deteriorate in its financial woes.
In recent years the municipality’s administrative deficiencies has significantly hindered it’s ability to comply with its obligations under the National Treasury’s Debt Relief Programme. Consequently, in July 2024 the municipality was issued with a notice indicating its persistent breaches under the MFMA Debt Relief Plan and possible removal from the programme (Rall, 2024).
The state owned enterprise Eskom has recently attached four of the municipality’s bank accounts through the Sheriff of the Court (Bulbulia, 2024). Eskom has indicated that the acquisition of these accounts are aimed at recovering an over R8 billion arears in electricity bills owed to it by the Emfuleni municipality. Eskom further indicated that it had exercised all mediatory avenues aimed at collecting the revenue of the services it rendered to the Emfuleni municipality since 2018, this ultimately prompted for the seizing of the municipality’s accounts through the court (Patel, 2024).
The R8 billion owed by the Emfuleni municipality amounts to about 10% of an estimated R82 billion in municipalities debt owed to Eskom in South Africa, with the Emfuleni municipality ranking 3rd in payment arrears owed to Eskom by a municipality (Mafisa, 2024).With the municipality’s accounts have been seized, all payments into the accounts would be directly obtained by Eskom.
The Economic Freedom Fighters(EFF) regional leader Nkululeko Dunga, attributed the municipality’s financial challenges and consequential inability to pay the R8 billion owed to Eskom – to African National Congress(ANC) officials having allegedly been involved in corrupt activity within the municipality while under administration by the provincial government in 2021 to 2023 (IOL Politics, 2024).
According to the DA Cooperative Governance and Traditional Affairs provincial committee member Nico de Jager, the attachment of the municipality’s bank accounts could negatively impact the salary payments of municipal service workers, this in turn would drastically impact the municipal service provision of numerous communities within the municipality (Mafisa, 2024).
Emfuleni municipality residents have expressed their concerns around the existing service delivery issues experienced within their communities. Fear in the municipality looms as the attachment of its accounts are said to further fuel the current service delivery challenges across communities in the municipality (Mashale, 2024).
With the Emfuleni municipality having zero access to four of its accounts; communities across the municipality could potentially experience a severe deterioration of essential services such as waste removal and the provision of water and electricity.
REFERENCES
1. Bulbulia, T. 2024. Emfuleni Municipality’s Bank Accounts Attached For Eskom To Recover R8bn Debt. EngineeringNews. September 12th. https://m.engineeringnews.co.za/article/emfuleni-municipalitys-bank-accounts-attached-for-eskom-to-recover-r8bn-debt-2024-09-12. Date Of Access: 18th September 2024
2. Getty Images. 2024. Debt Collection Concept With Financial Bill, Equal-Arm Balance, A Book, And A Gavel. Image. https://photos.com/featured/debt-collection-concept-with-financial-bill-equal-arm-balance-a-book-and-a-gavel-tommy.html?utm_source=GettyImages&utm_medium=website&utm_campaign=GettyImagesBuyPrint. Date Of Access: 18th September 2024
3. IOL Politics. 2024. EFF Blames ANC For Emfuleni Municipality’s Failure To Pay R8 Billion Eskom Debt, Demands Accountability. IOL News. September 13th. https://www.iol.co.za/news/south-africa/gauteng/eff-blames-anc-for-emfuleni-municipalitys-failure-to-pay-r8-billion-eskom-debt-demands-accountability-25f3e4e8-9aaa-49b0-b1e3-5c656757f845. Date Of Access: 18th September 2024
4. Mafisa, I. 2024. Emfuleni Municipality: Fears That Workers Won’t Be Paid And Service Delivery Will Completely Collapse. The Citizen. September 13th. https://www-citizen-co-za.cdn.ampproject.org/v/s/www.citizen.co.za/news/south-africa/emfuleni-municipality-fears-that-workers-wont-be-paid-and-service-delivery-will-completely-collapse/amp/?amp_js_v=0.1&_gsa=1#webview=1. Date Of Access: 18th September 2024
5. Mashale, K. 2024. Emfuleni Municipality Given An Ultimatum To Shape Up. SowetanLive. September 16th. https://www-sowetanlive-co-za.cdn.ampproject.org/v/s/www.sowetanlive.co.za/amp/news/2024-09-16-emfuleni-municipality-given-an-ultimatum-to-shape-up/?amp_js_v=0.1&_gsa=1#webview=1. Date Of Access: 18th September 2024
6. Nkadimeng, I. 2024. Emfuleni Can’t Pay R8bn Eskom Debt ‘Because Residents Don’t Have Jobs’. TimesLive. September 17th. https://www-timeslive-co-za.cdn.ampproject.org/v/s/www.timeslive.co.za/amp/news/south-africa/2024-09-17-emfuleni-cant-pay-r8bn-eskom-debt-because-residents-dont-have-jobs/?amp_js_v=0.1&_gsa=1#webview=1. Date Of Access: 18th September 2024
7. Nondywana, T. 2024. Emfuleni: DA Warns Of Complete Services Collapse If No Urgent Intervention. The Citizen. September 15th. https://www-citizen-co-za.cdn.ampproject.org/v/s/www.citizen.co.za/news/emfuleni-da-warns-of-complete-services-collapse-if-no-urgent-intervention/amp/?amp_js_v=0.1&_gsa=1#webview=1. Date Of Access: 18th September 2024
8. Patel, F. 2024. Eskom Attaches Debt-Ridden Emfuleni’s Bank Accounts To Recover R8bn. The Citizen. September 13th. https://www-citizen-co-za.cdn.ampproject.org/v/s/www.citizen.co.za/news/eskom-attaches-emfuleni-bank-accounts-recover-debt/amp/?amp_js_v=0.1&_gsa=1#webview=1. Date Of Access: 18th September 2024
9. Rall, S. 2024. Eskom Attaches Emfuleni Municipality’s Bank Accounts To Recover R8 Billion. IOL News. September 12th. https://www.iol.co.za/news/south-africa/gauteng/eskom-attaches-emfuleni-municipalitys-bank-accounts-to-recover-r8-billion-15c2f4e2-9639-4168-83e5-057beb1865ad. Date Of Access: 18th September 2024
10. Sicetsha, A. 2024. Eskom Seizes Emfuleni Municipality’s Four Bank Accounts Over R8bn Debt. SwisherPost. September 12th. https://swisherpost.co.za/news/eskom-seizes-emfuleni-municipalitys-four-bank-accounts-over-r8bn-debt/. Date Of Access: 18th September 2024
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