When A Municipality Owes R2 billion, What Does That Say About The Bigger Picture?

The recent reports on Msunduzi Municipality, home to Pietermaritzburg, highlight a worrying pattern that’s playing out across South Africa’s local governments. The city now owes over R2 billion to two of its key service providers: Eskom and uMngeni-uThukela Water Board. The reasons are depressingly familiar: non-payment, bypassed meters, theft of services, and a lack of meaningful enforcement.

The municipality is reportedly losing around R3 million a month to stolen water and electricity, and has struggled to collect from both households and businesses. Even government entities have fallen behind on payments. While repayment arrangements are in place, the sheer scale of the debt raises a simple but serious question: how did we allow things to get this bad?

The answer isn’t just about money. It’s about governance, accountability, and culture. We often talk about financial management in technical terms, but what’s happening here reflects a deeper erosion of the principles that make local government work.

Msunduzi is not alone. The Auditor-General’s most recent report confirms that only 15% of South Africa’s municipalities received clean audits. Despite many having full-time CFOs and finance departments, municipalities still spent R1.47 billion last year on consultants, often to do the job those internal teams were supposed to do. In many cases, consultants step in, while the municipal staff step back. As the AG put it: “They leave their desks.”That isn’t a capacity gap, it’s a culture problem.

When theft of services becomes normal, when large debtors are allowed to carry on without consequences, and when basic financial reporting is continuously outsourced, the effects are immediate. Property values stagnate. Suppliers lose confidence. Infrastructure projects stall. And most importantly, communities begin to disengage from the very institutions that are supposed to support them.

This is about more than service delivery. It’s about restoring dignity, economic opportunity, and the kind of confidence that allows people to put down roots and build lives in their cities.

I often think about how different the conversation is in other parts of the world. Cities like Austin or St. Petersburg have faced similar challenges, but have managed to reframe their governance approach. They didn’t rely on flash-in-the-pan incentives. They built trust through consistent service, disciplined administration, and long-term planning. Investors responded because the foundations were strong, not because the marketing was clever.

We can learn from that. Imagine if Johannesburg took two or three key corridors and declared them infrastructure-led development zones, with transparent procurement, proper financial oversight, and long-term budgeting insulated from political cycles. We don’t need perfection, we need proof that things can work.

Too often in South Africa, municipal performance rises and falls with political leadership. But in well-functioning democracies, the system doesn’t collapse when the leadership changes. That’s because governance structures are built to endure. We need to rethink how municipalities are staffed and run, with continuity, credible succession, and clearly defined lines between administration and politics.

That’s especially true when it comes to financial functions. If we want municipalities to be functional, investable, and respected, we need to build strong internal teams, not just deploy consultants. We need finance professionals who view their role not as compliance officers, but as stewards of community futures. This is how we stop outsourcing accountability and start embedding it.

Municipal finance may not grab headlines, but it underpins everything else. When it works, service delivery improves, trust is restored, and economic activity follows. When it fails, as we’re seeing in Msunduzi, the cost isn’t just measured in unpaid bills; it’s measured in lost opportunities and declining civic pride.

If we want people to pay, invest, and stay, we have to lead by example. That starts with getting the basics right: paying suppliers, maintaining infrastructure, enforcing revenue collection, and submitting credible budgets on time. None of that is possible without a culture shift inside our municipalities, one that values discipline, professionalism, and public service.

Msunduzi’s R2 billion debt may seem like an isolated crisis, but it reflects something far broader. It shows us what happens when accountability erodes and short-term thinking replaces long-term strategy. And unless we fix the culture behind the numbers, no amount of money will fix the outcomes.

South Africa deserves municipalities that function, not only because it’s the fiscally responsible thing to do, but because it’s the foundation of dignity, stability, and progress.