A preliminary investigation into the relationship between municipal debt and the financial viability of waterboards in South Africa

ABSTRACT The provision of water and sanitation services in South Africa is complex due to historical apartheid spatial planning whose remnants are still evident in the democratic country. The rural areas which are mostly occupied by black Africans still, on average, have water services backlog compared to urban areas. At a national level for South Africa to achieve the Sustainable Developmental Goal 6, the country must decisively deal with the backlog and a staggering more than R14 billion debt that the municipalities owe to the waterboards. The current study used the Municipal Strategic Self-Assessment and financial health (FH) check-up tools to determine if there is a causal relationship between the vulnerability of municipalities and the financial viability of waterboards. A linear regression was computed using the SPSS statistical programme to assess the relationship between the FH of the waterboards and the vulnerability index (VI) of the municipalities. It was found that a high VI was more prevalent in the rural municipalities than in the urban municipalities, pointing to a need to develop a differentiated financial framework for these rural municipalities. The study recommended that municipalities should implement remedial actions and waterboards should perform FH check-ups, and there must be consequence management.