The National Treasury has revealed that 42 of the 69 municipalities whose July equitable share transfers were initially withheld have now had their funding reinstated,
The Alternative Information and Development Centre (AIDC) has sharply criticised the National National Treasury's decision to withhold billions of rands in funding from dozens of municipalities, arguing that the move unfairly punishes poor households while failing to address the root causes of South Africa's local government financial crisis.
IOL previously reported that Treasury had temporarily withheld the July 2026 equitable share transfers to 69 municipalities to enforce fiscal discipline, address financial mismanagement and strengthen accountability among municipal officials and office-bearers.
Treasury cited persistent and serious non-compliance with the Municipal Finance Management Act, with approximately R13.5 billion of the R110 billion allocated for the 2026/27 financial year initially affected. While some municipalities have since had their funding restored after meeting Treasury's conditions, others continue to have their allocations withheld.
In a statement issued on Tuesday, the organisation said Treasury's decision to temporarily withhold July 2026 Local Government Equitable Share (LGES) transfers from the 69 municipalities was a "false solution" to municipal financial distress, insisting that the country's funding model for municipalities is fundamentally flawed.
