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Treasury set to withhold extra funding for 23 KZN councils after failure to spend on infrastructure

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Treasury set to withhold extra funding for 23 KZN councils after failure to spend on infrastructure

7th December 2023

By: News24Wire

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In a province ravaged by floods that caused R25-billion worth of infrastructure damage, at least 23 municipalities in KwaZulu-Natal are at risk of failing to get additional funding from the National Treasury as a result of their failure to spend at least 60% of their municipal infrastructure grants (MIGs).

The additional funding is usually released by National Treasury in December and is aimed at eradicating municipal infrastructure backlogs in poor communities. 

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The MIG is also used to ensure that councils can provide basic services such as water, sanitation, roads and street lights.

Major businesses, such as RCL Foods, have recently been decrying the state of municipal infrastructure for hamstringing their businesses.

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After Treasury writes to municipalities to inform them that they will not be receiving additional funding, Cooperative Governance and Traditional Affairs (Cogta) MECs usually intervene in the hopes of coercing the finance minister to reverse their decision.  

The implications of having additional funding withheld include further deterioration of municipalities whose funding is already hampered.

Citing Division of Revenue Act reports, KwaZulu-Natal Cogta MEC Bongiwe Sithole-Moloi in July warned that, as of April 2023, more than R1.17-billion allocated for the MIG was underused by municipalities in the province.

News24 has seen the list of KwaZulu-Natal municipalities that failed to spend at least 60% of their grants before the halfway mark of the financial year.

The list is doing the rounds among senior national Cogta leaders.

The underspending municipalities are:

  • Umuziwabantu Local Municipality;
  • uMshwathi Local Municipality;
  • uMngeni Local Municipality;
  • Msunduzi;
  • Richmond;
  • oKhahlamba;
  • Alfred Duma;
  • uThukela District Municipality;
  • uMvoti Local Municipality;
  • Amajuba District;
  • eDumbe Local Municipality;
  • uMhlabuyalingana Local Municipality;
  • uMlalazi Local Municipality;
  • King Cetshwayo District Municipality;
  • Mandeni Local Municipality;
  • Maphumulo Local Municipality;
  • Ndwedwe Local Municipality;
  • iLembe District Municipality;
  • uMzimkhulu Local Municipality;
  • KwaDukuza Local Municipality;
  • Jozini Local Municipality, and
  • Mpofana Local Municipality

Democratic Alliance KwaZulu-Natal Cogta spokesperson Martin Meyer said he had raised the underspending of MIGs a few times in the provincial legislature.

"The main reason municipalities give is that it's the supply chain management's [new] system that delays things and they can't spend the money on time. From our view, it's quite often just bad planning and an inability to plan in advance. I do agree that there is a problem with supply chain management systems, but that is definitely not the only reason they're underspending," Meyer said.

He said there was a paradox in municipalities in that infrastructure was falling apart while officials were underspending on infrastructure grants.

"It's money given to them to maintain and upgrade their infrastructure," Meyer said.

Provincial Cogta departments administer MIGs.

At the time of writing, KwaZulu-Natal Cogta spokesperson Siboniso Mngadi said he was awaiting comment from the relevant officials. His comment will be added when it is received. 

National Treasury spokesperson Cleo Mosana was unavailable for comment. 

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