Treasury halted funds to 69 failing municipalities as Ramaphosa unveils local reforms
The Treasury suspended an equitable share transfer to 69 municipalities that kept failing to pay their creditors, Finance Minister Enoch Godongwana said on Wednesday. On Thursday, President Cyril Ramaphosa was due to launch a revised White Paper on Local Government, 13 days before South Africans vote in municipal elections.
Money, with conditions
Godongwana told Parliament that local government's share of non-interest spending will reach 10% over the medium term. He called that "a significant milestone".
| Measure | Amount |
|---|---|
| Extra local government equitable share | R21.8 billion |
| Extra general fuel levy allocation (restores metros' share to 23%) | R13.4 billion |
| Extra money for smart meters, over the medium term | R3.5 billion |
| Paid to creditors by end-July after suspensions | R4.2 billion |
Source: 2026 MTBPS speech.
The issue can no longer be only about resources. It must also be about results.
Where the money goes wrong
The Treasury's review found that most municipalities have enough money for day-to-day operations but "spend too much on running costs", Godongwana said. That leaves too little for long-term infrastructure and maintenance. A final report recommending a funding model is due by the end of the year.
He pointed to Sol Plaatje, Kannaland and Bela-Bela as places where revenue collection had improved. The Treasury is also publishing proposed changes to the Public Finance Management Act and the Municipal Finance Management Act for public comment.
Ramaphosa's White Paper
The launch is set for 14:00 on Thursday at the Birchwood Hotel and OR Tambo Conference Centre in Ekurhuleni, the Presidency said. The theme is "Every Municipality Must Work: From Policy to Collective Action".
The Presidency said the event would bring together the political and administrative leadership of all 257 municipalities. The launch will also introduce an Implementation Plan and a Transition Management Body to move from policy to action.
