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Kannaland Municipality debt to result in job losses?

The Kannaland Municipality owes R37 million to creditors and has a bank overdraft of R4 million.

South African money. Picture: Facebook.

CAPE TOWN - Some Western Cape municipalities are financially unstable and struggling to pay millions owed to creditors.

Finance MEC Ivan Meyer and Local Government officials yesterday briefed the provincial legislature on the status of recovery plans for the troubled municipalities.

It also emerged during a briefing by the Auditor-General's office that the future of six municipalities are uncertain due to a regression in financial health.

The Kannaland Municipality owes R37 million to creditors and has a bank overdraft of R4 million.

Officials could not say how much the Beaufort West Municipality owes creditors, but they have confirmed it has a R5 million overdraft.

Finance MEC Meyer says the Kannaland Municipality is just financially unviable.

"You can do everything. You can send the best municipal manager, you can pay all the creditors six months later. It's the same situation. Why? Because the municipality's architecture of revenue collection and sustainability doesn't make that place a viable municipality."

Committee chairperson Masizole Mnqasela has warned that the non-payment of creditors - most of whom are small businesses - will result in job losses in the small towns.