South Africa's Treasury Withholds R13.5bn from 69 Municipalities Over Financial Mismanagement

The National Treasury announced it is temporarily withholding R13.5 billion in July equitable‑share transfers from 69 municipalities after they failed to meet financial‑management requirements and continued unauthorised, irregular, fruitless and wasteful expenditure. Deputy Director‑General Ogalaletseng Gaarekwe said the overall equitable share for the fiscal year is R110 billion and only the R13.5 billion is being held back until councils provide signed payment plans and evidence of compliance.

The freeze covers municipalities in all nine provinces, including major metros such as Johannesburg, Nelson Mandela Bay, Buffalo City, Mangaung and Mopani. Treasury said funds could be released in stages – possibly within a week, two weeks or a month – depending on how quickly each municipality satisfies the conditions. The action is intended to ensure that deductions for pensions, unemployment insurance and PAYE are paid to the proper funds and to curb wasteful spending ahead of the November local elections, where the ruling ANC faces a strong challenge in Johannesburg.

Separate findings showed that 16 municipalities had improperly retained workers’ pension contributions, prompting the Treasury to withhold additional transfers as a corrective measure. Treasury warned that similar withholdings could be applied to national departments that owe municipalities large sums for water and electricity services.