National Treasury said it will release funding that’s been withdrawn from dozens of municipalities after they’ve submitted plans on how they’ll pay their debts.
The Treasury on Tuesday withheld R13.5-billion from 69 municipalities including Johannesburg, the country’s economic hub, that are struggling to manage their finances. The measure was taken to instil fiscal discipline, reduce irregular and wasteful expenditure and ensure that municipal officials are held accountable, it said.
Since 2021/22, municipalities have incurred R24.1-billion rand in wasteful expenditure.
“What we are requesting from those municipalities is for them to give us the payment plan,” Ogalaletseng Gaarekwe, deputy director-general of intergovernmental relations at the Treasury, told reporters in Pretoria on Wednesday. “Once they give us that, we’ll release a portion of the money, which is probably one-third for them to go pay those accounts, as agreed with those creditors.”
The rest of the funds will be released on condition that the municipalities reduce unauthorized, irregular, fruitless and wasteful spending by at least 25% by end-September and make payment arrangements with creditors, among other measures, Gaarekwe said.
