DORAB passed, but MPs warn: Municipalities in 'distress' over R156 billion debt

The National Assembly has passed the Division of Revenue Amendment Bill (DORAB), which details the equitable division of national revenue and funds among the national, provincial, and local spheres of government.

 While the amendment to the legislation was largely supported by most parties, Members of Parliament (MPs) continue to raise serious concerns over the dire state of the country's municipalities.

Standing Committee on Appropriations Chairperson, Mmusi Maimane, highlighted the ongoing challenges facing municipalities despite the funding arrangements provided by the legislation.

"Local government is in distress. Municipalities owe creditors around R156 billion, of which 72.8% is now more than 90 days overdue. They themselves are owed R427 billion."

The EFF's Sinawo Tambo called for a fundamental change in the Equitable Share Formula and how municipalities are funded.

"We want to change the Equitable Share Formula so that we change how we fund municipalities because the 1999 assumptions shaped by apartheid-era policy, which presume that local government municipalities can be self-relying and self-resilient based on revenue generation, are completely false."

This suggests a belief that the current funding model is based on outdated and unrealistic assumptions about the financial self-sufficiency of local government.