Non-payment culture and the financial performance of urban electricity utilities in South Africa

Bibliographic Data

ID21540916
AuthorsGenius Murwirapachena (0000-0003-0767-932X, Durban University of Technology, corresponding author), Martin Mulunda Kabange (0000-0003-0837-4747, Durban University of Technology), Christopher Ikechuckwu Ifeacho (Durban University of Technology)
Year2023
Volume40
Issue3
Pages615-631
Publication date2023-05-04
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueDevelopment Southern Africa (JOURNAL)
Journal identifiersISSN: 0376-835X • E-ISSN: 1470-3637
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/0376835x.2022.2051438
OpenAlexW4220714899
LanguageEN
Citations received4
References cited29

Non-payment for services continues to challenge sustainability in municipal service delivery across South Africa. Literature provides that the culture of non-payment stems from the apartheid era where mass civil disobedience manifested through boycotting the payment of rates. This study examines the impact of the non-payment culture on municipal financial performance in South Africa. Panel data for 28 municipalities for the years 2005–19 is used, and the random-effects model is employed to estimate the relationship between municipal financial performance and non-payment. Results confirm that non-payment has a negative impact on financial performance. For every R1000 increase in bad debts written off, financial performance is reduced by R291. Further, grants from the national government, the number of consumers, and the number of household units receiving free basic electricity positively affect financial performance. These revelations warrant the need for more innovative approaches that transform non-payment into a culture of payment

Business · Debt · Economics · Panel data · Payment · Public economics · Public Procurement and Policy · Public-Private Partnership Projects · Urban and Rural Development Challenges · Finance · Marketing

Tools

Open DOI