Finance MInister Enoch Godongwana recently warned the City of Johannesburg that it is facing a deepening financial crisis. National Treasury has since withheld July 2026 municipal transfers temporarily to over 60 local government structures, including Johannesburg, for failing to timeously remedy its financial problems.
National Treasury’s announcement to temporarily withhold July 2026 equitable share transfers to 60 municipalities has also again exposed the massive financial mismanagement taking place at many of South Africa’s municipalities.
On Tuesday, National Treasury said its decision to withhold the fund transfers followed "persistent and serious non-compliance" with the Municipal Finance Management Act (MFMA) and its supporting regulations, despite support provided by the National Treasury through guidance, engagement and communication.
Six municipal governments in the Eastern Cape are affected, including Buffalo City, Nelson Mandela Bay, and Makana; 16 in the Free State, including Mangaung; 6 in Gauteng, including the City of Johannesburg; 7 in KwaZulu-Natal; 8 in Limpopo; 11 in the Northern Cape; 13 in North West; and 3 in the Western Cape.
National Treasury said that since 2021-22, municipalities have incurred R24.12 billion in fruitless and wasteful expenditure; irregular expenditure amounted to R145.21bn, with R40.14bn incurred by municipalities in the 2024-25 financial year alone.
