The content on this page is not written by Polity.org.za, but is supplied by third parties. This content does not constitute news reporting by Polity.org.za.

The South African Local Government Association (SALGA) Gauteng has noted the decision by National Treasury to withhold equitable share allocations from six municipalities in the province. In response, the SALGA Gauteng Provincial Office Bearers  (POB), led by Chairperson Jongizizwe Dlabathi, convened an urgent Municipal Finance and Fiscal Policy Working Group meeting on 10 July 2026. During the meeting, the affected municipalities presented their positions, outlined the evidence submitted to National Treasury, and identified the technical and institutional support required from SALGA.

SALGA maintains that while municipalities must comply with financial governance requirements, enforcement measures should not undermine the constitutional mandate of local government nor compromise the delivery of essential services. The equitable share remains a critical source of funding, particularly for municipalities facing constrained revenue bases, rising bulk service costs, historical debt burdens and increasing socio-economic pressures.

Accountability Must Be Fair and Evidence-Based

SALGA's concern is not a rejection of accountability but a call for a fair, transparent and collaborative intergovernmental process. The meeting confirmed that affected municipalities had engaged National Treasury, submitted representations and, in several instances, provided supporting evidence demonstrating progress or compliance.

The compliance areas identified by National Treasury include reducing unauthorised, irregular, fruitless and wasteful (UIFW) expenditure; strengthening consequence management, disciplinary boards and Municipal Public Accounts Committee (MPAC) processes; implementing sustainable payment arrangements with bulk suppliers and institutions such as water boards, Eskom, SARS, the Auditor-General of South Africa (AGSA) and pension funds; and adopting funded budgets.

SALGA acknowledges that these measures are fundamental to sound financial management. Municipalities must continue strengthening internal controls, improving revenue management, maintaining credible records, honouring sustainable repayment agreements and ensuring that oversight structures address UIFW matters and consequence management without delay.

Withholding Funds May Weaken Service Delivery

SALGA Gauteng is concerned that withholding equitable share allocations may unintentionally deepen the financial challenges these measures seek to address. Many municipalities rely on these allocations to provide basic services, support indigent households, meet operational commitments and honour payment arrangements with suppliers.

Financial sanctions should not create a cycle in which municipalities become less able to address the very compliance shortcomings they are required to resolve. SALGA therefore urges National Treasury to ensure that enforcement measures are proportionate, evidence-based and responsive to the circumstances of each municipality, particularly where credible evidence of compliance or corrective action has been submitted.

SALGA's Support and Advocacy Role

As the representative voice of local government, SALGA Gauteng will continue supporting affected municipalities by consolidating their submissions, identifying common challenges and escalating unresolved matters through the appropriate political and technical intergovernmental structures.

SALGA's support will include:

• Support municipalities to improve evidence management, record keeping and timely submission of documentation to National Treasury.
• Assist municipalities to strengthen UIFW reduction plans, MPAC processes, disciplinary board functionality and consequence management systems.
• Facilitate engagements with bulk suppliers, including water boards and Eskom, to promote realistic and sustainable repayment arrangements.
• Advocate for fair treatment where state-owned entities, government departments or other public institutions owe municipalities money.
• Promote revenue enhancement, credible indigent registers, funded budgets, cost-of-supply studies and sustainable financial recovery interventions.

SALGA Gauteng calls on National Treasury to engage directly and urgently with affected municipalities before finalising or continuing decisions to withhold equitable share allocations. Municipal representations should be acknowledged, assessed and responded to without undue delay. Where additional information is required, municipalities should receive clear guidance and a reasonable opportunity to address any outstanding requirements.

At the same time, municipalities must continue taking decisive steps to strengthen financial governance by reducing UIFW expenditure, improving oversight and consequence management, honouring credible payment arrangements, strengthening revenue collection and ensuring that budgets are funded, realistic and aligned to service delivery priorities.

SALGA Gauteng remains committed to supporting municipalities while advancing accountability, financial discipline and service delivery stability. Compliance and enforcement should strengthen local government, not weaken its ability to fulfil its constitutional responsibilities. SALGA therefore calls on all parties to resolve this matter urgently, fairly and collaboratively in the best interests of municipalities and the communities they serve.

Issued by South African Local Government Association