DA flags R13bn unpaid creditors, warns of financial crisis in Ekurhuleni
Dlabathi has strongly disputed the DA’s characterisation of the situation. He dismissed the allegations as misleading and politically motivated, particularly in an election year.
The DA in Ekurhuleni has raised concerns about the city’s financial health, alleging that the municipality has accumulated approximately R13b in unpaid trade creditors, in violation of the Municipal Finance Management Act (MFMA).
According to the DA’s Ekurhuleni finance spokesperson, Fanyana Nkosi, the concerns were confirmed through written replies from Gauteng MEC for Finance Lebogang Maile, which the party says paint a troubling picture of ongoing financial mismanagement.
The DA claims that the city is failing to pay creditors within the legally required 30-day period, as stipulated in Section 65(2)(e) of the MFMA, and that no disciplinary action has been taken against the accounting officer or any officials responsible for the alleged failures.
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The party further alleges that Ekurhuleni has recorded six consecutive years of operating deficits, despite tabling budgets that reflect projected surpluses.
The DA also criticised provincial and national government for what it calls a lack of decisive intervention, arguing that payment arrangements with Eskom and Rand Water are being used to justify inaction, while smaller service providers are left financially exposed.
“These arrangements may temporarily ease cash flow pressures, but they do not absolve the city of its legal obligations,” said Nkosi, warning that many smaller suppliers have already been pushed into insolvency.
The party has since written to the Minister of Finance, calling for urgent national intervention and warning that continued monitoring without enforcement could lead to financial collapse, with dire consequences for service delivery and jobs.
MMC of Finance Jongizizwe Dlabathi has disputed the DA’s characterisation and dismissed the allegations as misleading and politically motivated, particularly in an election year.
Dlabathi said the figures being circulated by the DA are incorrect and lack proper context.
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He said, according to the city’s creditors and debtors analysis, the current outstanding amount is approximately R3.3b, spread across 30, 60, and 90-day periods.
“When all outstanding categories are combined, the city’s total exposure stands closer to R10b, not the R13b alleged by the DA,” said Dlabathi.
The MMC explained that a substantial portion of the outstanding amount relates to historic, liquidated invoices dating back to the 2022/2023 financial year and earlier, which cannot simply be settled using the current financial year’s budget.
“It would be financially irresponsible and unlawful to use the current budget to indiscriminately pay prior-year commitments, as this would compromise service delivery and undermine the approved 2025/2026 budget,” Dlabathi said.
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He added that invoices are processed only after confirmation that services were rendered, and that the city is currently conducting a detailed review to separate current-year obligations from those inherited from previous financial years.
The MMC said this process is aimed at ensuring accountability, particularly where officials may have exceeded the municipality’s approved budget allocations.
Dlabathi acknowledged the pressure on service providers but insisted that the ANC-led administration is committed to improving revenue collection, strengthening financial discipline and restoring fiscal credibility, while safeguarding service delivery.
