As part of its mandate to strengthen municipal financial sustainability and revenue enhancement,
Provincial Treasury is partnering with municipalities to develop tailored revenue enhancement strategies.
These strategies are designed to help municipalities increase internal funding capacity for sustainable
service delivery.
During the recent Thuntsha Lerole Programme held in Matshelapad, the Tswaing Local Municipality
benefited from this support when it joined forces with the Treasury in an intensive campaign focused on
addressing outstanding debts owed to the municipality by government institutions. The department
facilitated engagement between the municipality and the Department of Education regarding outstanding
debt owed by Section 21 schools. Through this intervention, the municipality is likely to recover a
significant portion of the debt.
Ms. Linda Nenghovela, Chief Director for Municipal Support in the department, explained that government
institutions owing municipalities are among the main reasons for municipal financial strain. She noted that
government debt impacts municipal performance by straining budgets, increasing debt-servicing costs,
hindering service delivery, reducing investment in maintenance and infrastructure, and affecting
municipalities’ ability to meet financial obligations.
“Excessive debt can also lead to higher taxes, affect property values, and increase the risk of service cuts
or disruptions, creating a negative feedback loop that undermines citizen well-being and community
stability,” she said.
Nenghovela highlighted that Tswaing Municipality collects most of its revenue through property rates and
service charges for electricity and water, as outlined in its rates policy. Other revenue sources include
grants from national and provincial government and service fees. However, she noted that the
municipality faces major challenges in revenue collection, including a high level of unrecoverable debt
and long collection periods, which make it difficult to fund essential services.
Government debt to municipalities hampers service delivery by diverting funds needed for maintenance
and new projects, leading to reduced service quality, financial instability, and potential service disruptions.
This accumulation of debt also affects broader municipalities’ stability, prompting initiatives such as
conditional grants and debt relief measures to improve governance and ensure sustainable services.
End.
Issued by: North West Provincial Treasury
For more information or clarity please contact:
Media Liaison Officer : Ms. Lesedi Makhubela @062 103 2798 or connielesedi@gmail.com or
Director Information Management: Ms. Kesalopa Gill (018)388 3584 or email kgill@nwpg.gov.za