National Treasury Freezes R13.5bn From 69 Municipalities in Fiscal Crackdown

Image Source: News24

National Treasury has withheld the July 2026 equitable share transfers to 69 municipalities across all nine provinces, in what it describes as a corrective action to instil fiscal discipline and root out financial misconduct. The freeze, which covers R13.5-billion, affects major metropolitan areas including the City of Johannesburg, Nelson Mandela Bay, Buffalo City (KuGompo) and Mangaung.

Treasury’s Deputy Director-General Ogalaletseng Gaarekwe told a media briefing in Pretoria that the withholding is not punitive but remedial, and that municipalities can avoid service delivery disruptions by using their own revenue while submitting creditor-backed payment plans and complying with reporting requirements. She noted that last year, 75 municipalities had their equitable share withheld, and all received the funds back by early August after taking the required corrective action.

The scale of the underlying crisis is significant. Since 2021/22, municipalities collectively incurred more than R24-billion in fruitless and wasteful expenditure, more than R145-billion in irregular expenditure, and more than R118-billion in unauthorised expenditure. By the 2024/25 financial year-end, municipalities owed R3.4-billion in interest to Eskom and R1.2-billion to water boards. The South African Local Government Association has flagged R480-billion in consumer debt as part of the structural pressures placing municipalities under severe financial distress.

Key facts:
– R13.5bn in July equitable share transfers withheld from 69 municipalities across all nine provinces (Sources: African Insider / GroundUp)
– Affected metros include Johannesburg, Nelson Mandela Bay, Buffalo City and Mangaung (Source: African Insider)
– Since 2021/22, municipalities accumulated over R24bn in fruitless and wasteful expenditure and R145bn in irregular expenditure (Source: African Insider / GroundUp)