CAPE TOWN, South Africa (XOL Africa) — South African parliamentary oversight committees have welcomed the planned release of 7.1 billion rand ($406 million) in withheld July equitable share transfers to 49 municipalities, while stressing that the funds must protect basic services without allowing officials responsible for governance failures to avoid accountability.
The Portfolio Committee on Cooperative Governance and Traditional Affairs, together with the Standing Committees on Public Accounts, Finance and Appropriations, welcomed the announcement made Tuesday by National Treasury and the Department of Cooperative Governance and Traditional Affairs.
The committees had previously raised concerns about the withholding of equitable share transfers to municipalities and directed that the provision of essential services, particularly to indigent households, must be protected during the process.
Finance Minister Enoch Godongwana said the release of the funds, scheduled for July 31, would be conditional and aimed at safeguarding basic service delivery while requiring affected municipalities to address serious weaknesses identified under Section 216(2) of the Constitution.
Dr. Zweli Mkhize, chairperson of the Portfolio Committee on Cooperative Governance and Traditional Affairs, said the decision addressed concerns that vulnerable communities could suffer because of failures by municipal officials.
“Releasing the funds must, however, not suspend accountability or allow responsible officials and office-bearers to escape accountability for their role in governance failures,” Mkhize said.
The committees welcomed assurances that the release would be accompanied by a structured compliance program requiring municipalities to meet reporting and implementation deadlines between Sept. 30 and Nov. 30, 2026.
Under the program, affected municipalities will be expected to demonstrate progress in addressing governance weaknesses, conducting investigations, pursuing disciplinary action, recovering financial losses and, where necessary, initiating criminal proceedings.
The compliance effort will involve the South African Local Government Association, provincial premiers and governments, members of executive councils responsible for finance and cooperative governance, provincial treasuries and the affected municipalities.
The committees also welcomed commitments to strengthen early-warning systems and provide targeted assistance to municipalities facing financial and structural distress.
Songezo Zibi, chairperson of the Standing Committee on Public Accounts, said he was particularly encouraged by the commitment to end the practice of municipalities adopting budgets without sufficient funding.
“We are particularly encouraged by the undertaking to end the practice of adopting unfunded municipal budgets,” Zibi said.
He said the commitment, combined with support from National Treasury, the Department of Cooperative Governance and provincial institutions to help municipalities eliminate unaffordable and nonessential spending, could help address persistent dysfunction in local government.
Zibi also welcomed an indication from Cooperative Governance Minister Velenkosini Hlabisa that the number of municipalities with unfunded budgets had fallen from 113 to about 76.
“We welcome this and support the intention to reduce this number to zero over two years,” Zibi said.
The committees further welcomed the government’s commitment to apply similar enforcement measures to national and provincial government departments that owe money to municipalities.
The issue has been raised as part of broader calls for accountability across all three spheres of government, particularly as municipalities struggle with financial pressures and service delivery obligations.
“We note the ministers’ remarks that the next step is to apply a similar approach to national and provincial government departments that owe money to municipalities,” Mkhize said, adding that the committees would seek further details on the proposed measures.
The committees also acknowledged receipt of a report requested during their previous meeting. National Treasury submitted the report this week on the implementation of Section 216(2) of the Constitution, which provides for the withholding of transfers to organs of state that commit serious or persistent financial management violations.
Mkhize said National Treasury and the Department of Cooperative Governance would be expected to demonstrate that the new joint approach protects essential services, supports municipalities facing structural distress and ensures accountability for both institutions and individuals responsible for financial and governance failures.
“The new approach announced today reflects the committees’ earlier directive that fiscal enforcement must be lawful, transparent and accompanied by support rather than treated as the sole municipal recovery mechanism,” Mkhize said.
