Cosatu Concerned About Rising Municipal Debt

The Congress of South African Trade Unions Cosatu says it is concerned by the rising municipal debt as it will affect basic services. This is after National Treasury issued a circular revealing that the total amount owed by municipalities has increased by R24 billion in the 2024/2025 financial year.

National Treasury has also revealed that the outstanding debt by municipalities stood at R128 billion in the 2024/2025 financial year.

This is an increase from R104.3 billion reported in the same period in the 2023/24 financial year.

"A decade ago, about 10 of municipalities were financially distressed, today its about 70. Weve witnessed about 36 municipalities struggling to pay salaries. There are about 160 municipalities that are in arrears on pension due to the employees. We see many municipalities especially in rural areas which cannot provide the most basic services as a consequence, they are closing these towns, retrench workers, are setting the communities into absolute poverty," says Cosatu National Spokesperson Matthew Parks.

The Public Service Accountability Monitor says it is equally concerned but says strides are being made to address the problem.