Minister Ramokgopa Warns of Growing Municipal Debt Crisis Threatening Eskom and Taxpayers
Johannesburg, December 19th, 2024 – Electricity and Energy Minister Kgosientsho Ramokgopa has sounded an urgent alarm over the escalating municipal debt owed to Eskom, describing it as a critical “existential problem” that poses significant risks to South Africa’s energy utility and its taxpayers.
He also said 2 million people were not paying Eskom for electricity.
During the presentation of Eskom’s end-of-year Financial Results, Ramokgopa revealed the staggering growth of municipal debt, which has surged from R74 billion to approximately R95 billion in a relatively short span. He expressed grave concern over the increase in debt, noting it is increasing at an average rate of R3 billion per month.
“This is not just an Eskom issue,” the Minister said. “It’s a sovereign problem that requires immediate national attention.”
The Minister highlighted how the ballooning debt undermines the impact of government interventions, such as fiscal support and performance-based loans to stabilise Eskom’s finances. Despite Eskom meeting its obligations to the National Treasury, the mounting municipal debt threatens to erode these efforts.
He warned that the financial burden will inevitably shift to taxpayers and diligent electricity customers through higher tariffs and increased fiscal reliance. This, he said, disproportionately penalizes those who already bear the cost of consistent bill payments.
“The taxpayer, those who are diligent in paying for their electricity, will face additional demands to cover for others who choose to be delinquent,” Minister Ramokgopa explained.
While acknowledging that some municipalities face genuine financial hardships, the Minister distinguished this from cases where payments are deliberately withheld. He stressed that Eskom alone cannot solve this issue and called for decisive intervention from national authorities.
“This problem cannot and should not be left to Eskom to resolve on its own. It requires executive authority to take action,” he said, adding that further discussions on the root causes of the debt growth would follow in future engagements.
