Finance Minister Enoch Godongwana has defended the National Treasury’s decision to withhold R13.5 billion in funding from 69 municipalities, saying the move is intended to address persistent financial mismanagement rather than punish local governments.
The Treasury announced that the withheld funds will instead be paid directly, in phases, to Eskom, water boards, and other statutory bodies. The aim is to safeguard the delivery of essential services, settle outstanding municipal debts, and ensure pension obligations are met.
According to the Treasury, municipalities that demonstrate improved financial management and comply with the required governance standards will have their equitable share allocations reinstated.
The decision comes amid growing concerns over the financial health of municipalities across South Africa, many of which are struggling with mounting debt, poor revenue collection, and governance failures that have undermined service delivery.
To unpack the implications of Treasury’s decision, Chris Yelland, an energy expert, delved into what the intervention means for municipalities, Eskom, and the future of local government finances.
Photo: @GovernmentZA/X
