The government introduced a debt relief package that will help to write off historic municipal debt to Eskom which will lead to free up revenue at municipalities. However, the municipalities need to meet strict conditions in order to qualify.

Minister in the Presidency, Khumbudzo Ntshavheni, announced on Thursday that "these conditions include maintaining a minimum average revenue collection targets for electricity and water services," SANews reported.

"Ring-fencing all electricity, water and sanitation revenue collected; and paying the Eskom current account first and the bulk water current account second before any other monthly payments," the minister continued.

Minister Ntshavheni addressed the media, briefing on Wednesday's Cabinet meeting outcome, and said that the National Treasury government department has decided to provide energy company, Eskom debt relief, which will bring sustainability in their service.

Although the minister explained that Eskom has to follow strict conditions to write off the municipal debt, interest, and penalties.

The relief package will "improve Eskom's balance sheet, relief the financial crisis - Eskom municipal defaulters, bring about critical changes in the energy sector, incentivize a change in behavior in the municipal space, restore basic minimum financial management best practices and deal with the consumer culture to not pay for services consumed (LG and Eskom)."

According to South Africa's National Treasury's official document, the government has been considering since last year to facilitate Eskom's unsustainable R423 billion debt. The National Treasury explained that this relief will help the energy company to restructure and strengthen the balance sheet.

The government has proposed a "debt-relief arrangement covering R254 billion of Eskom debt (about R168 billion in capital and R86 billion in interest) over the next three years."

Aside from the relief package, Minister Ntshavheni also noted that the government is working closely with the energy company to ensure that the units at power stations get repaired quickly so that Stage 6 can be avoided in the future.

"Acts of sabotage continue to plague Eskom's infrastructure and, therefore, the continued deployment of 880 SANDF [South African National Defence Force] members to safeguard a number of Eskom power stations is part of measures to prevent attempts to collapse the national grid," she said.

President Cyril Ramaphosa ordered last week to deploy 880 SANDF members to protect Eskom power stations across the country because of theft and sabotage cases that are increasing the load-shedding problem in South Africa.

Aside from electricity, Ntshavheni noted that the country's exports tally of R184 billion in March represents that South Africa's economy remains resilient.

"These significant amounts, although marginally lower than in March 2022, demonstrate how robust the South African economy remains, even in the period of low economic growth," the minister said.

She praised the manufacturing sector for its contribution of more than R85 billion while she also praised the mining sector for contributing R84 billion and agriculture for R11 billion.

"A total of R41 billion of these exports are to other African countries, indicating the strides South African industries are making in broadening their markets across the continent," she added.

The minister concluded the statement by noting that South Africa's trade has increased in countries like China, Belgium, Italy and the United Arab Emirates.

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