Municipal consumer debt increased by R10.6 billion in the third quarter of the 2016/17 financial year, National Treasury announced.

The total debt amounted to R128.3 billion, compared to R117.7 billion which was reported in the second quarter.

Treasury said not all the outstanding debt of R128.3 billion was “realistically collectable” as these amounts were inclusive of debt older than 90 days, interest on arrears and other recoveries.

“If consumer debt is limited to below 90 days, then the actual realistically collectable amount is estimated at R24.1 billion,” National Treasury said.

The largest component of debt was R86 billion and related to households.

On Monday, National Treasury released local government’s revenue and expenditure for the third quarter of the 2016/17 financial year.

The third quarter publication covers financial and conditional grant information from 257 municipalities.

“A total amount of R1.6 billion has been written off as bad debt,” Treasury said, and added that government accounted for 5.1% or R6.6 billion of the total amount.

According to the Third Quarter Local Government Section 71 Report, metropolitan municipalities are owed R65.7 billion in outstanding debt as of 31 March 2017.

This represents an increase of R11.3 billion, compared to the third quarter of the 2015/16 financial year.

“The City of Johannesburg was still owed the largest amount at R18.5 billion,” Treasury said. “This was followed by the Ekurhuleni Metro at R13 billion, the City of Tshwane at R8.6 billion and Cape Town at R8.1 billion.” All these amounts were increases from the previous quarter’s figures.

Households in metropolitan areas were reported to account for R43.4 billion of outstanding debt to metros, followed by businesses, which accounted for R18.8 billion of the outstanding debt.

Debt owed by government agencies was approximately R1.9 billion of the total outstanding debt owed to metros.

Secondary cities were owed R26.4 billion in outstanding consumer debt, compared to the R25.9 billion reported in the second quarter of 2016/17.

“The majority of debt was owed by households, which amount to R20.1 billion of the total outstanding debt,” National Treasury said. “Out of the total debt of R26.4 billion, R22.2 billion or 84.1% has been outstanding for more than 90 days.”

“Municipalities owed their creditors R34 billion as of 31 March 2017, a decrease of R292 million from the second quarter of 2015/16,” Treasury added.

It indicated that the Free State had the highest percentage of outstanding creditors greater than 90 days at 85.9%, followed by North West at 77.4% and Limpopo at 74%.

Treasury said the year-on-year increase in outstanding creditors could be an indication that municipalities are experiencing liquidity and cash challenges and are consequently delaying the settlement of outstanding debt owed.

Disputes also have an effect on the increasing creditors, Treasury added.

It indicated that collectively, municipalities spent R245.1 billion of the total adjusted expenditure budget of R400.2 billion as of 31 March 2017.

And in respect of revenue, total billing and other revenue amounted to 70% or R276.1 billion of the total adjusted revenue budget of R394.4 billion.