This financial strain stems largely from the inability of many residents, the majority of whom are indigent, to pay for basic municipal services, according to Mangaung mayor Gregory Nthatisi. Appearing before members of the Free State Legislature on Tuesday (15/10), Nthatisi laid bare the severity of the metro’s financial challenges, highlighting that while some of the outstanding debt is owed by government departments and businesses, the lion’s share stems from struggling households across Mangaung.

“The R12 billion, it’s actually R13 billion that we are talking about. The majority of it, which is close to R9 to R10 billion, is informed by communities, your mother, my sister, the indigent. That’s the amount of money that makes the R12 billion.”

He explained that a large portion of the debt is effectively unrecoverable due to its age and the socio-economic status of those who owe it.

“It’s in indigent, it’s in people who are no more, it’s in a history of a non-collection that was done over the years. It’s not a reflection of money that speaks to yesterday or in a financial administration that I’m in. It ranges to administrations.”

The Free State government reportedly owes the municipality R2 billion, while businesses around the metro owe the remaining balance. Nthatisi said when his administration took office, the total debt breakdown stood at R1.8 billion from government, R8 billion from residents, and R2.5 billion from businesses.

To address the revenue shortfall, the metro has enlisted the help of nine law firms to aid in debt recovery, a move that has drawn scrutiny from some members of the provincial legislature. However, Nthatisi defended the decision, stating that the law firms were appointed after the council unbundled a previous debt collection tender, which was only run by one company.

He claimed that this intervention is already yielding positive results, as the collection rate has improved and people have slowly started to pay for services since the appointment of the law firms.

Meanwhile, government departments that owe municipalities may soon face direct deductions from their allocated budgets. According to Nthatisi, the matter was discussed at a recent Lekgotla, with the treasury and the Department of Cooperative Governance and Traditional Affairs agreeing on a joint resolution.

“What we have done, we went to Treasury, and in our interaction with Treasury, Treasury met with COGTA. So the two ministers discussed, it was disclosed that all government departments that owe municipalities their monies are going to be deducted from their budgetary systems, their grants, and everything. By December, as we move into January, we will be having the money that they owe us in our coffers,” said Nthatisi.

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OFM News/Kekeletso Mosebetsi mvh