The City of Tshwane is grappling with severe financial distress, facing a massive debt of over R24 billion owed by residents and businesses. This mounting debt is now straining the metro’s already vulnerable finances, raising significant concerns for officials tasked with stabilizing the city’s budget.

According to Gauteng MEC for Finance and Economic Development, Lebohang Maile, the root of the problem lies in the metro’s ineffective credit control policy, which has left a large portion of services unpaid for. At a recent press conference, Maile disclosed that 72.8% of this debt comes from households, amounting to R17.7 billion. Meanwhile, businesses owe R5.8 billion, contributing to the total debt of R24.3 billion as of September 30, 2024.

“This highlights that the current credit control measures are not yielding results,” Maile stated. “The metro’s liquidity is compromised, creating a financial strain that makes it challenging to fund essential services.”

This ongoing debt issue has forced the City of Tshwane to operate on an unfunded budget since 2021. The recent rise in debt—from R22.7 billion in the pre-audited figures for the 2024 financial year to the current R24 billion—further aggravates this financial instability.

Tshwane’s mayor, Dr. Nasiphi Moya, acknowledged the metro’s precarious situation, pointing out the budget deficit of over R4 billion. Moya emphasized the urgent need to address the city’s finances to ensure the delivery of vital services to residents. “Our administration is committed to making our budget sustainable and aiming for a funded budget within the next few months,” Moya explained.

A key focus for the mayor’s office includes revising expenditure patterns and enhancing revenue collection methods. Moya noted, “Our workforce has not seen a pay increase in two years, and we’re actively working on a plan to address this without further disrupting our budget.”

Another pressing issue is the R6 billion debt owed to Eskom, the national power utility. “We’ve initiated discussions with the minister of electricity, Kgosientsho Ramokgopa, on how to manage this Eskom debt. By resolving this, we can relieve a significant portion of the fiscal pressure facing the City,” Moya said.

The City of Tshwane’s financial troubles paint a complex picture, with officials needing to navigate an unfunded budget, billions in unpaid debt, and the critical need for reform. As the city leadership takes on these challenges, the outcome will determine the sustainability of Tshwane’s essential services and infrastructure.

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