Ramateu Lefty Monyokolo | Huge municipal debt signifies systemic water crisis

ordinarySouth Africa’s escalating municipal water debt is too large and persistent to be treated simply as an accounting problem. It is a warning signal from a water-services systen under monting financial, operational, institutional and infrastructure pressure.

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The scale of the crisis

At December 31 2025, aggregate municipal consumer debt stood at

R467.2-billion

, up from R405.1-billion in the second quarter of 2024/25. Households accounted for R335.3-billion, commercial customers R94.7-billion and organs of state R27.6-billion. R406.8-billion, or 87.1%, was older than 90 days. Municipalities owed creditors R160.8-billion, including R27.3-billion for bulk water, while actual collection was only 69%, against a budgeted 78.6%. These figures reveal something fundamental. Municipalities are simultaneously creditors and debtors.

Tracing debt through the value chain

Why does the system continuously produce debt, and what must change so we do not recreate it? Debt travels through the entire water value chain. Water must be captured, stored, treated and transported through bulk infrastructure before municipal reticulation, metering and billing; wastewater must be collected, treated and safely discharged or reused. Money moves in the opposite direction. Consumers pay municipalities, municipalities pay bulk-water suppliers, and institutions finance operations and infrastructure upstream. When payment fails, pressure travels through the chain. Persistent municipal non-payment can constrain water boards’ ability to maintain infrastructure and finance capital programmes. Rand Water’s 2025 Integrated Annual Report recorded municipal debt to water boards exceeding R28-billion during 2024/25. The debt is therefore moving through the water value chain.

Confronting non-revenue water losses

The 2023 No Drop assessment found national non-revenue water had increased from approximately 37% in 2014 to 47% in 2023. The Department of Water and Sanitation attributed this to physical leakage, inadequate or malfunctioning meters, illegal connections and weaknesses in billing and revenue collection. Every cubic metre treated and distributed without legitimate revenue has a cost. Reducing non-revenue water is therefore simultaneously a water-security, infrastructure and revenue-enhancement programme. Every leak repaired saves water and operating costs; accurate metering strengthens billing; every rand recovered strengthens municipal capacity to maintain infrastructure and pay suppliers.

Balancing supply scarcity and high demand

South Africa is water-scarce, yet the Department of Water and Sanitation reports national consumption at approximately 218 litres per person per day, compared with an international average of about 173 litres. Gauteng has been reported at approximately 266 litres. Comparisons must be interpreted carefully because definitions, climates and methodologies differ, but they show demand is not immutable. Metering, pricing signals, efficient appliances, public awareness, leakage reduction, technology and demand management can influence consumption. More than 98% of South Africa’s available water resources are already allocated, while Department of Water and Sanitation projects a potential national supply deficit of approximately 17% by 2030 if additional interventions are not implemented. Water saved, recovered or reused must increasingly be regarded as another source of supply.

Deploying intelligent water technology

Smart meters, District Metered Areas, pressure management, SCADA, IoT sensors, leak detection, data analytics and artificial intelligence can transform municipal water management. But technology is not a substitute for institutional capability. A smart meter linked to an inaccurate customer database will not solve revenue problems; monitoring cannot compensate for poor maintenance; AI cannot substitute for competent management and accountable governance. A modern water utility should be able to answer, in real time: How much water entered the system, where did it go, how much was consumed, lost, billed and collected, and where should the next rand be invested? That is modern utility management.

Adapting institutional and partnership models

Infrastructure without institutional capability is unsustainable. Municipalities differ in population, infrastructure condition, financial position, scale and technical capability. One institutional model cannot therefore be imposed everywhere. Where municipal capability is strong, it can be strengthened through professional management, asset management, maintenance, revenue collection and non-revenue-water reduction. Elsewhere, ring-fenced municipal or regional utilities may provide greater operational focus and specialist capability. Public-public partnerships also deserve greater attention. The Vaal Corporation Water Utility, a Rand Water-Emfuleni partnership, illustrates how public institutions can combine capabilities through a dedicated vehicle while retaining public ownership and accountability. Public-public-private partnerships may also bring capital, technology or specialist expertise to wastewater reuse, desalination, smart metering, renewable energy and rehabilitation. Private participation must create measurable public value, not transfer public risk while privatising returns. Long-term concessions and project-specific arrangements should remain available where appropriate. Experiences in Mbombela and the iLembe area provide lessons about tariffs, investment obligations, service standards, contract management, risk allocation and oversight. Outcome-based contracts should also reward independently verified improvements in non-revenue water, leakage, metering, collection, continuity of supply, wastewater compliance, energy efficiency and infrastructure reliability. The principle is simple – the institutional model should follow the problem, not the other way around.

Building climate resilience and payment discipline

Water reform must anticipate a changing climate. Droughts, floods, changing rainfall, rising temperatures, urbanisation and population growth are altering supply and demand. Municipal planning must incorporate source diversification, water reuse, sustainable groundwater development, catchment protection, appropriate desalination, resilient energy and infrastructure designed for increasingly variable conditions. We should not finance yesterday’s infrastructure for tomorrow’s climate. Payment discipline remains essential. Those who can afford to pay must pay; municipalities must settle current bulk-water accounts; government departments must pay legitimate municipal accounts on time. Indigent households must be protected and access to basic water services safeguarded. Debt relief may sometimes be necessary in a turnaround, but without institutional reform it merely resets the clock.

From debt management to performance management

South Africa must therefore move from debt management to performance management. We should measure water institutions not only by debtors’ books, but by water availability and quality, non-revenue water, infrastructure condition, maintenance, metering, billing accuracy, collection efficiency, wastewater compliance, investment and financial sustainability. South Africa needs a stronger social contract around water. Government must provide effective policy, regulation and oversight. Municipalities must provide reliable services and accurate accounts. Water institutions must operate efficiently. Businesses and government departments must pay what they legitimately owe. Communities must protect infrastructure, consumers who can pay must pay, and ordinary people must be protected. This is a shared responsibility built around four principles: access, affordability, accountability and responsibility. AWSISA can strengthen collaboration, institutional innovation, knowledge exchange and translation of sector dialogue into practical interventions. The AWSISA Africa & Global South Water and Sanitation Dialogue in November 2026 provides an opportunity to move from diagnosis to implementation.

Securing South Africa’s water future

Municipal water debt is telling us something important: parts of our water-services system are financially and operationally unsustainable. Our response cannot simply be to collect or write off billions of rand and return to business as usual. If we solve only the debt, the debt will return. But if we reduce water losses, improve metering and billing, strengthen collection, maintain infrastructure, professionalise institutions, deploy technology intelligently, reward measurable outcomes, reform delivery arrangements where necessary and invest for climate resilience, we begin to change the system that produces the debt. Let us move beyond asking who owes whom and begin asking what kind of water system South Africa needs to secure its future. Let us build capable, accountable and financially sustainable institutions. Let every partnership become a platform for innovation, every litre saved an investment in water security, and every rand recovered an investment in institutional resilience. Most importantly, let us judge success not merely by balance sheets, but by whether children, patients, households, farmers, businesses and communities can depend on safe water and dignified sanitation. That is the water future we must build together. Every drop counts. Every partnership matters.

• Monyokolo is the chairperson of the Association of Water and Sanitation Institutions of South Africa.

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