National Treasury has temporarily withheld the July 2026 equitable share transfers to dozens of municipalities across South Africa over what it described as “persistent and serious non-compliance” with the Municipal Finance Management Act (MFMA).
In a statement on Tuesday, Treasury said the move is intended “to instil fiscal discipline and ensure that public money is properly managed” and that unauthorised, irregular, fruitless and wasteful expenditure (UIFWE) is addressed.
The affected municipalities span all nine provinces and include the City of Johannesburg, Buffalo City, Nelson Mandela Bay and Mangaung metros.
Treasury stressed that the intervention is “a corrective rather than punitive measure” and said it does not expect the temporary withholding of funds to affect service delivery.
The department said municipalities had been given sufficient notice and received extensive support through guidance, training and engagements, but many continued to fail to adopt funded budgets, address financial misconduct and meet statutory obligations.
It warned that continued non-compliance is threatening the financial sustainability of Eskom, water boards and other public institutions.
According to the Auditor-General’s 2024/25 local government audit report, municipalities have incurred R145.21 billion in irregular expenditure and R24.12 billion in fruitless and wasteful expenditure since the 2021/22 financial year.
“Transfers will resume once the affected municipalities meet the required conditions and submit proper proof of the conditions being met,” Treasury said.
The department added that it will continue working with municipalities and provincial governments to strengthen financial management and improve accountability.
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