Gauteng Finance MEC Nkululeko Dunga has sounded the alarm on the province's escalating intergovernmental debt, which currently stands at a staggering R2.5 billion. This significant financial burden poses substantial risks to both the province and its municipalities, threatening to undermine their financial stability. The debt, which represents money owed to municipalities by the provincial government, is creating structural risks and placing strain on local government operations.

During a recent address, MEC Dunga emphasized the importance of collaboration between the provincial government and municipalities to resolve the issue. He highlighted the need for improved financial management and accountability to ensure timely payments and reduce the overall debt. Intergovernmental debt occurs when one level of government owes money to another, and in this case, the Gauteng provincial government owes funds to municipalities within the province. This type of debt can impact service delivery and hinder municipalities' ability to invest in infrastructure and other essential services if not properly managed.

The R2.5 billion figure represents a substantial financial challenge for Gauteng, requiring immediate attention to safeguard the province's economic future. A comprehensive plan is being developed to tackle the debt and prevent further accumulation. Details of the plan were not immediately released, but MEC Dunga emphasized the importance of working together to resolve the issue and ensure the province's financial stability.