Research from the Competition Commission on the cost-of-living crisis confirms the need for a turbocharged economy to save Northern Cape municipalities from financial ruin, especially as provincial departments continue to owe significant arrears on their municipal accounts.
As of June 2025, for example, provincial health and education departments owed Sol Plaatje R25.8 million and R17.815 million respectively. Nearly two-thirds of this debt is owed for more than three months already, making it increasingly unlikely that these accounts will be paid in full. The Competition Commission finds that electricity prices increased by 68% and water prices increased by 50% over the past five years. In that same time, however, the provincial equitable share increased by 23%. While this was partly due to revisions of the equitable share formula which intended to provide more funding for health services in the province, it is clear that the provincial purse does not grow fast enough to cover increases in municipal tariffs.
Non-payment by provincial departments harms municipal collection rates and could endanger the continued participation of local governments in the Eskom debt relief programme, which requires a minimum collection rate to be upheld.
The Northern Cape cannot afford to continue down this path of economic decline, but must embrace bold reforms to support the growth and development of the provincial economy. We must empower municipal administrations to implement rigorous credit and debt control policies, with revenue derived from water and electricity sales ringfenced for upgrades, maintenance and expansion of critical infrastructure. Doing so would allow local businesses to flourish and will incentivize greater public sector participation in infrastructure investments.
I submitted numerous questions on the management of municipal debt to the Northern Cape Department of Cooperative Governance, Human Settlements & Traditional Affairs and requested briefings on the status of the Eskom debt relief programme in the province. The DA will continue to use the oversight mechanisms at our disposal to strive for the turbocharging of the Northern Cape.