Overview
- National Treasury froze R13.5 billion of July equitable-share transfers to 69 municipalities on Wednesday, with the City of Johannesburg facing about R3.6 billion held back.
- Treasury says the action responds to persistent breaches of the Municipal Finance Management Act, including widespread unauthorised, irregular, fruitless and wasteful expenditure recorded since 2021/22.
- Affected councils must submit signed repayment agreements with creditors such as Eskom and water boards, achieve at least a 25% cut in UIFWE measured July–September, and provide evidence of active consequence management before funds are released.
- Officials argue the move is corrective and short term and that most municipalities rely mainly on own revenue for services, but analysts, unions and local leaders warn the freeze could worsen service delivery and heighten political tensions before local elections.
- The withholding covers municipalities in all nine provinces, follows repeated Treasury warnings and Auditor‑General findings of massive municipal financial failures, and could be extended to national and provincial departments that fail to settle disputed municipal accounts.