GQEBERHA – Government leaders have reaffirmed their support for Nelson Mandela Bay Municipality’s turnaround programme after National Treasury temporarily withheld the metro’s July equitable share allocation over financial management failures.

Nelson Mandela Bay is one of 69 municipalities across South Africa affected by the intervention, which National Treasury announced on 7 July after identifying what it described as “persistent and serious non-compliance” with the Municipal Finance Management Act (MFMA).

The affected municipalities include several major metros, among them Buffalo City, Mangaung and the City of Johannesburg. The equitable share is an unconditional allocation that national government transfers to municipalities to help fund basic services and support their day-to-day operations.

By withholding the July allocation, National Treasury has temporarily suspended that month’s payment until the municipality meets specified financial governance and compliance requirements.

Financial governance was a key focus during the second day of the Cooperative Governance and Traditional Affairs (CoGTA) Ministerial Visit to Nelson Mandela Bay on 9 July. Eastern Cape MEC for CoGTA Zolile Williams reaffirmed “the provincial government’s commitment to supporting the Nelson Mandela Bay Municipality’s governance and institutional reform programme.”

Addressing financial governance, Williams said “sound financial management and accountability are essential to maintaining the confidence of oversight institutions and supporting the Municipality’s long-term sustainability.”

Executive Mayor Babalwa Lobishe said “the focus should remain on implementing practical solutions rather than assigning blame.”

She reaffirmed the municipality’s commitment to strengthening governance, institutional capacity and financial management, saying meaningful progress depended on the support and commitment of the entire council to implement the municipality’s turnaround programme.

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The municipality has also sought to reassure residents following Treasury’s decision.

Municipal spokesperson Sithembiso Soyaya said the temporary withholding of Nelson Mandela Bay’s July equitable share allocation was “administrative and corrective” and “does not mean the Municipality is financially insolvent or incapable of delivering services.”

He said National Treasury had confirmed the withholding was intended “to promote compliance with the Municipal Finance Management Act (MFMA) and strengthen financial governance.”

Soyaya added that the municipality was “fully committed to working with National and Provincial Treasury to satisfy all conditions for the release of the withheld funds.”

According to the municipality, corrective measures already under way include financial governance reforms, stronger revenue management and expenditure controls, enhanced consequence management for irregular, unauthorised, fruitless and wasteful expenditure, and a multidisciplinary team engaging directly with National Treasury.

The municipality also said “essential services — water, sanitation, electricity, waste management and emergency services — remain the highest priority” while every effort was being made to minimise any impact on service delivery as it works to secure the release of the withheld funds.

Meanwhile, the Nelson Mandela Bay Civil Society Coalition said it recognised National Treasury’s constitutional authority to withhold transfers from municipalities that repeatedly fail to comply with financial management legislation.

“Public funds cannot continue to be disbursed without accountability, and municipalities that have become synonymous with corruption, financial mismanagement, unfunded budgets and reckless governance cannot simply expect business as usual,” the coalition said in a statement issued on 7 July.

While acknowledging the need to strengthen fiscal discipline, the coalition warned that residents could ultimately bear the consequences.

“The Coalition is deeply concerned about the devastating consequences this decision will have for ordinary residents, who are already paying the price for years of governance failure,” it said.

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