The South African Local Government Association is concerned about Treasury’s withholding of July’s equitable share payments to selected municipalities.  

The Treasury announced it would do so due to the 69 municipalities’ poor financial management. Locally, this affects the Theewaterskloof, Laingsburg and Beaufort West municipalities.  

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The National Treasury held a media briefing on Wednesday to provide further details on its decision.

SALGA’s Motalatale Modiba said the association understands Treasury’s response but highlights that there are structural and systemic fiscal issues that require urgent reform. He noted that some factors contributing to “municipal distress” go beyond administrative failures, and include weak local economies, rising service demands, high electricity and water costs and growing poverty.  

“Municipal consumer debt now exceeds R480 billion as at 31 March 2026, with government entities and the public among the biggest contributors. This weakens municipalities’ ability to meet obligations to Eskom, water boards, pension funds, SARS and other creditors,” said Modiba.  

While SALGA acknowledges the need to strengthen governance and accountability, it said the intervention must include broader reforms.

“Any withholding of equitable share must balance compliance objectives with the impact on service delivery and municipal financial sustainability. It is also important to distinguish genuine governance failures from deeper structural challenges,” Modiba warned. 

Modiba maintains that enforcement measures alone will not resolve the financial difficulties confronting municipalities. It said long-term solutions should address municipal debt, unfunded mandates, infrastructure backlogs and fiscal imbalances, while supporting municipalities to improve governance, financial sustainability and service delivery. 

“SALGA welcomes Treasury’s indication that the withholding process is corrective, not punitive, and that allocations can be released once conditions are met. SALGA will continue supporting affected municipalities to improve recovery plans, governance, compliance, expenditure controls and financial sustainability.”