The National Treasury has temporarily withheld R13.5 billion in equitable share transfers from 69 municipalities to enforce compliance with financial management rules. The Portfolio Committee on Cooperative Governance and Traditional Affairs welcomed the move. The South African Local Government Association urged balance with service delivery needs.
The decision, announced this week, targets municipalities that have failed to address unfunded budgets, debts to Eskom and water boards, or irregular expenditure. Treasury officials said the freeze could last one or two weeks if councils submit payment plans and proof of corrective action. The funds were due on 8 July, with next transfers scheduled for December and March.
Committee Chairperson Dr Zweli Mkhize said the step confirms governance failures observed during oversight visits. He added that weak consequence management cannot continue without impact on residents.
SALGA National Spokesperson Motalatale Modiba acknowledged the need for accountability but noted structural challenges in local government. Treasury Deputy Director-General Ogalaletseng Gaarekwe stressed that the action aims to protect bulk suppliers and is not intended as punishment.
