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CITY OF EKURHULENI CLARIFIES CREDITOR BALANCE AND AFFIRMS PROGRESS ON PAYMENTS

By Thulasizwe City of Ekurhuleni 1294

The City of Ekurhuleni notes the recent political commentary regarding a reported R13 billion balance owed to service providers. To provide clarity to the public, the R13 billion reflects the creditor balance at month-end 30 June 2025, and it should not be interpreted as overdue or outstanding debt across all service providers. It is also important to note that by 30 September 2025, a substantial portion of these balances had already been settled, underscoring that this was never overdue debt but part of the City’s normal financial cycle.

A significant portion of this balance relates to bulk services supplied to the City, and not to small businesses in the main as purported. The main contributors at 30 June 2025 were: 

  • ESKOM: R5,8 bn 
  • ERWAT: R1,1bn
  • Rand Water: R440m (current account – meaning invoices due as part of the latest billing cycle, not arrears)

The higher creditor balance recorded as at 30 June 2025 is mainly attributable to two factors:

  • Increased spending on projects that were being finalised at the close of the financial year, resulting in higher volumes of invoices being processed; and
  • The reconciliation process during year-end, where invoices are accrued based on supplier statements to ensure full and accurate financial disclosure.

Before payments are finalised, the City conducts rigorous quality checks to verify that all invoices accrued from statements are valid, accurate, and supported by proof of goods or services received. By 2 October 2025, the City had already reduced its trade creditor balance by R10.2 billion, reflecting significant progress in addressing outstanding obligations.

The City has formal payment arrangements in place with Eskom and Rand Water, and all invoices relating to the 30 June 2025 billing cycle for these two bulk suppliers have been paid in full. We continue to honour these arrangements as part of prudent cash-flow management. 

Ekurhuleni remains committed to paying service providers within the legislated timeframes set out in the Municipal Finance Management Act (MFMA), including section 65(2)(e) which requires timely settlement of valid invoices. Where backlogs or timing mismatches have occurred, the City has intensified credit control and revenue collection measures to strengthen cash flow and accelerate payments to other creditors. 

Part of the City’s ability to accelerate the payment of outstanding creditors depends on the revenue it collects from municipal services. In this regard, we urge all users of municipal services to pay their accounts on time, as this directly supports service delivery and strengthens the City’s capacity to meet its obligations to suppliers.

We value the role played by businesses, large and small, in sustaining services and jobs across our metro. The City will continue working with suppliers to promptly validate and settle compliant invoices, while safeguarding uninterrupted service delivery to residents. At the same time, it is important that financial information is presented in its proper context and not used selectively for political expediency, as this risks creating unnecessary panic among stakeholders and undermines confidence in the City’s progress.

END