Parliament Flags Nxuba’s R918m Eskom Debt Crisis

The Select Committee on Agriculture, Land Reform and Mineral Resources has raised serious concerns over the financial and service delivery challenges facing Inxuba Yethemba Local Municipality following an oversight visit to Nxuba, formerly Cradock.

The parliamentary committee concluded its week-long oversight visit on Thursday, 27 August 2026, after engagements with the municipality, stakeholders and community development workers.

According to Parliament, one of the biggest concerns is the municipality’s Eskom debt, which has ballooned from R127 million to R918 million following a 2020 High Court order.

The committee also heard about persistent raw sewage pollution of the Fish River, water supply challenges and the absence of an electricity master plan.

Parliament said the consolidation of water and sanitation services under Chris Hani District Municipality resulted in Inxuba Yethemba losing water service revenue, further constraining the municipality’s income.

The committee was also told that civil society was reportedly taking over many municipal functions amid challenges in the provision of services.

While core electricity supply was reported to have improved over the past six months, businesses and the agricultural sector continue to experience the effects of prolonged electricity outages and water supply problems.

Eskom and representatives of the Department of Electricity and Energy told the committee that consistent payment of the municipality’s current electricity account could result in interest relief and potentially reduce the total Eskom debt.

The municipality’s broader financial position also came under scrutiny.

According to Parliament, Inxuba Yethemba adopted an unfunded budget for the 2025/26 financial year, with its current liabilities exceeding its assets, largely because of debts owed to Eskom and the Auditor-General.

This resulted in the municipality’s equitable share being frozen on 8 July 2026. The funds were subsequently released a month later under strict conditions.

The Executive Mayor acknowledged the debt owed to Eskom but proposed that Eskom stop supplying electricity directly to three municipal wards and large businesses within the municipality.

The municipality argued that direct Eskom supply to these customers further undermines its ability to generate revenue.

The committee has now recommended an urgent meeting involving Provincial and National Treasury, the Auditor-General, the departments of Cooperative Governance and Traditional Affairs and Electricity and Energy, the South African Local Government Association and Eskom.

It wants the parties to provide a summary of measures already taken to deal with the municipality’s historical Eskom debt and payment of its current account.

The meeting is also expected to clarify what instructions, court proceedings or consequence-management measures have been implemented in connection with the non-payment of the debt.

The committee wants the process to ultimately produce an acceptable, binding and final solution to the municipality’s debt problems.

Committee chairperson Mpho Modise thanked participants for their cooperation during the oversight visit and emphasised the importance of continued engagement between the municipality and its stakeholders.

The findings were contained in an official statement issued by Parliament on Thursday.