In a recent report, South Africa’s Treasury has warned about debts owed to municipalities by consumers.

According to the report: “Aggregate municipal consumer debts amounted to R427.7 billion (compared to R339.9 billion reported in the fourth quarter of 2023/24) as at 30 June 2025...The largest component of this debt relates to households and represents 71.9% or R307.5 billion…Included in the outstanding debt is an amount of R376.1 billion or 87.9%, which is debt older than 90 days (historic debt that has accumulated over an extended period), interest on arrears, and other recoveries which may not be realistically collectable by municipalities.”

The Treasury also reported that: “as at June 2025…aggregated billing and other revenue was 93% or R617.3 billion of the total adjusted revenue budget of R663.5 billion [a] net underperformance against budgeted revenue [of] R46.2 billion in the 2024/25 financial year. This indicates that municipalities could not bill and generate the revenue that they budgeted for, therefore, resulting in less funding available to cover the budgeted expenditure.”

High levels of consumer debt owed to municipalities, matched with sub-budgetary collection rates, are partly a reflection of tough economic circumstances in the country, with per-capita GDP numbers having dipped for much of the past decade amidst anaemic investment and low rates of economic growth.

Additional factors behind high debt levels and low collection rates include plain municipal ineptitude and political reluctance of some municipalities to collect outstanding debts, particularly where the African National Congress has already lost a significant degree of political support. Reluctance to bill and collect aggressively is expected to increase in those municipalities ahead of local government elections scheduled for late 2026 or early 2027.