Finance Minister Enoch Godongwana has laid out stringent requirements for dozens of municipalities to have their funding restored, saying the move is aimed at restoring accountability and protecting public money.

Speaking at a media briefing on Friday, Godongwana said the decision to withhold July equitable share transfers from 69 municipalities was “not punitive” but “corrective”, aimed at addressing chronic poor financial management and governance across local government.

“This is a moment to restore accountability. Government stands firmly on the side of citizens, protecting their money, their services and their future,” the minister said.

The freeze affects municipalities across all nine provinces, including major metros such as Johannesburg, Nelson Mandela Bay, Buffalo City and Mangaung.

Billions lost to irregular expenditure

Godongwana outlined the scale of financial mismanagement, revealing that municipalities have racked up R24.12 billion in fruitless and wasteful expenditure since 2021-22, R145.21 billion in irregular expenditure, and R118.13 billion in unauthorised expenditure.

“R40.14 billion in irregular expenditure was incurred in 2024-25 alone,” he said.

The minister said 116 municipalities, nearly half of the country’s 257 municipalities, adopted unfunded budgets in 2024-25, whilst 48 had overdue third-party deductions.

Municipalities owed R3.40 billion in interest to Eskom and R1.21 billion to water boards by year-end, he added.

“Non-payment to suppliers and statutory bodies threatens the financial sustainability of bulk suppliers and disrupts service delivery,” Godongwana said.

Strict targets set for compliance

To have transfers resumed, municipalities must demonstrate compliance and submit proof of meeting several conditions.

Municipal public accounts committees must process unauthorised, irregular, fruitless and wasteful expenditure, recover losses where appropriate, and implement consequence management including disciplinary boards, investigations, disciplinary actions, recovery steps and criminal referrals where required.

Municipalities must also provide evidence of funded budgets and functioning disciplinary boards.

Godongwana set specific targets: a 15% reduction in irregular expenditure balances by August and another 15% by September.

“Transfers will resume once municipalities meet the required conditions and submit proof,” he said.

Officials face disciplinary action

The minister said political and administrative leaders must fulfil their fiduciary duties, warning that failure to do so risks disciplinary and criminal processes under the Municipal Finance Management Act.

“We are fighting to improve governance within municipalities, and with it the quality and consistency of service delivery, as well as to deal with the pernicious culture of non-payment,” he said.

Godongwana emphasised that the withholding action was structured to safeguard essential services by redirecting funds in tranches directly to Eskom, water boards and statutory bodies.

Provincial treasuries will monitor compliance, whilst National Treasury will continue to provide support through circulars, engagements and training.

The minister described local government as “the frontline of our democracy”, saying weak governance, unauthorised expenditure and non-payment result in penalties, interest charges, service interruptions and erode accountability and public trust.

All nine provinces affected

Affected municipalities include Emfuleni, Lesedi, Sedibeng district municipality, Merafong City and Rand West City in Gauteng; Makana, Sundays River Valley, Inxuba Yethemba and Port St Johns in the Eastern Cape; Letsemeng, Kopanong, Mohokare, Xhariep district municipality, Masilonyana, Tokologo, Matjhabeng, Nala, Dihlabeng, Nketoana, Maluti-a-Phofung, Phumelela, Mantsopa, Ngwathe and Mafube in the Free State.

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In KwaZulu-Natal, iMpendle, uMzinyathi district municipality, Newcastle, eMadlangeni, Amajuba district municipality, AbaQulusi and uMkhanyakude district municipality are affected.

Limpopo municipalities include Mopani district municipality, Musina, Thabazimbi, Modimolle-Mookgopong and Fetakgomo Tubatse.

In Mpumalanga, Victor Khanye, Emakhazeni and Nkomazi will have transfers withheld.

Northern Cape municipalities affected are Kamiesberg, Khâi-Ma, Ubuntu, Umsobomvu, Emthanjeni, Renosterberg, Thembelihle, Siyathemba, !Kai !Garib, Magareng and Phokwane.

North West municipalities include Madibeng, Kgetlengrivier, Tswaing, Mafikeng, Ditsobotla, Ngaka Modiri Molema district municipality, Naledi, Mamusa, Dr Ruth Segomotsi Mompati district municipality, City of Matlosana, Maquassi Hills and JB Marks.

In the Western Cape, Theewaterskloof, Laingsburg and Beaufort West are affected.

Municipalities were given written notice in advance and invited to submit reasons in writing why funds should not be withheld.

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