The Minister of Cooperative Governance and Traditional Affairs, Velenkosini Hlabisa, and the Minister of Finance, Enoch Godongwana, on Tuesday briefing members of the media on the temporary withholding of Municipal Equitable Share transfers.
The National Treasury and the Department of Cooperative Governance and Traditional Affairs (Cogta) have warned municipalities that future equitable share allocations will depend on improved compliance, despite the decision to release the remaining withheld July 2026 transfers from 31 July.
Finance Minister Enoch Godongwana said the release of the outstanding Local Government Equitable Share allocations should not be interpreted as an indication that affected municipalities had met the requirements of the Municipal Finance Management Act (MFMA) or addressed weaknesses in their financial governance.
Godongwana had earlier this month withheld equitable share transfers to 69 municipalities because of concerns over financial mismanagement. The decision followed a comprehensive assessment process and active monitoring of compliance in terms of section 216(2) of the Constitution and the applicable provisions of the MFMA.
He said National Treasury’s assessments identified material and ongoing weaknesses in the management of unauthorised, irregular, fruitless and wasteful expenditure (UIFWE), financial misconduct investigations, disciplinary processes, consequence management and broader municipal financial governance.
