Ngwathe Local Municipality has secured a major financial breakthrough after the Department of Water and Sanitation (DWS) confirmed a debt write-off of more than R84 million, strengthening the municipality’s efforts to restore financial sustainability and redirect resources towards essential service delivery.
The breakthrough follows Ngwathe’s participation in the DWS Debt Relief Scheme, which commenced on 1 July 2025 and provides municipalities with an opportunity to have qualifying capital debt written off when they meet strict payment and compliance conditions.
Upon entering the scheme, Ngwathe was required to settle all invoices relating to the 2024/25 financial year to qualify for the first one-third debt write-off. The municipality successfully met this requirement, paving the way for further relief.
The second phase required the municipality to maintain regular monthly payments towards its DWS obligations during the 2025/26 financial year. Ngwathe has continued to meet this condition, with DWS subsequently confirming further debt write-offs.
In recent correspondence and engagements with the municipality, DWS confirmed that more than R84 million in debt has been written off under the subsequent phase of the programme.
The municipality is continuing to settle its DWS invoices every month as it works towards qualifying for the final debt write-off. It has also committed to maintaining its payment obligations beyond the conclusion of the three-year DWS Debt Relief Scheme.
At the same time, Ngwathe is pursuing a similar solution to its Eskom debt. The municipality is engaging with Eskom, National Treasury, the South African Local Government Association (SALGA) and the national Department of Cooperative Governance to explore a debt-relief arrangement in line with the provisions of Section 78 of the Municipal Systems Act.
Municipal Manager Dr F.P. Mothamaha said the combined interventions were aimed at placing Ngwathe on a stronger and more sustainable financial footing.
“All these efforts will collectively ensure that the municipality becomes financially sustainable in the medium term, while continuing to contribute positively to our municipal service delivery programmes.”
Dr Mothamaha said the debt relief would enable the municipality to channel more resources towards critical priorities, including road maintenance and water provision across all towns within Ngwathe Local Municipality.
The R84 million write-off therefore represents more than a reduction in municipal debt—it provides Ngwathe with additional financial breathing room to strengthen its operations and accelerate service delivery while continuing its broader efforts to achieve long-term financial sustainability.
