Msunduzi ratepayers demand answers on financial crisis

Msunduzi ratepayers are hoping to engage with the municipal manager about the recent Financial Recovery Plan and the Revenue Enhancement Strategy that painted a bleak picture of the municipality's financial state

An FRP report noted that the Msunduzi Municipality experienced a rapid deterioration, moving from a positive cash position of R766 million to a cash deficit of R919 million in the 2024/25 financial year.

The municipality met with officials from the national and provincial treasuries on November 24. Among the key points of discussion were the financial state of the municipality, the operating budget performance, cash position, and financial ratios. 

The FRP report stated that while there was an improvement in revenue performance over two years, the municipality has not performed well in managing expenditure.

The report highlighted that the financial crises are accompanied by deep-rooted infrastructure challenges, governance failures, and poor institutional capacity. 

Some concerns on the operating budget were: 

• Major cost drivers are bulk purchases, inventory consumed, and contracted services.
• Bulk purchases are higher than FRP targets and the adjusted budget in 2024/25.
• Water and electricity losses are negatively affecting revenue generation and not assisting with cost reduction.
• Water distribution losses were 22% (R166.7 million ) in 2024/25.
• Electricity distribution losses were 18% (R715 million) in 2024/25.
• Contracted services increased by R51.5million  (6%) in 2024/25. 

The report stated that the current cash position is viewed with great concern and that the cash deficit is driven by escalating operating expenditure.

It indicated that it was important for the municipality to institute stricter discipline in expenditure management and cost containment. 

Anthony Walhausen, the CEO of  Msunduzi Association of Residents, Ratepayers and Civics (MARRC), said a virtual meeting with the National Treasury took place at the request of MARRC.

His concern was that Msunduzi is not charging many of its residents for using electricity, thus harming its capacity to generate income to swell its ailing coffers.

“They have failed to ensure that users of electricity have meters, and this causes the city to lose millions of rand in revenue. The city could also afford to assist many qualifying poor individuals who are not receiving government benefits, enabling them to access municipal services at a lower cost, but there has been no success in that area,” he said. 

Walhausen said the municipality's source of income includes service charges for water and electricity, property taxes/rates, rentals, licences and permits, government grants and subsidies.

“The National Treasury notes that the municipality is not collecting payment for electricity from users, and the situation is not improving. Water and electricity losses are negatively affecting revenue.

“There is an increase in the interest on debt, that is, money the municipality is owed, while expenditure, especially on outsourced work, is escalating. The municipality is not doing well in managing expenditure on contracted services, including repairs and maintenance, sewerage, and security. People must learn that there is nothing for free.”

Walhausen said the municipality needed to enhance local government revenue, improve service delivery, and support local development. 

“The municipality needs to fill vacancies, spend on salaries, and not depend on outsourcing and cadre deployment of unskilled and inexperienced managers. There are incapacity gaps, and they should be appointing more skilled and experienced staff, empowering internal staff, and reducing contracted services,” he said. 

Walhausen said that MARRC is doing its civic duty in reporting on illegal tampering and connections of electricity, and hopes that the municipality reacts timeously to stop these illegal tampering and connections. 

Msunduzi Mayor Mzimkhulu Thebolla said that the municipality is on an upward trajectory, and some of the issues raised were being addressed.

The municipality also held several operations to disconnect illegal connections in December 2025, including: 

• Officials from the Electricity Department continued their operation on Yellowwood Road in Woodlands, where several illegal electricity and water connections were identified and disconnected.
• An operation was conducted on Palframan Road, Mason’s Hill, where several illegal electricity connections were identified and disconnected.

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