PRETORIA, Gauteng — South Africa’s National Treasury has moved to temporarily suspend the equitable share allocated to 69 municipalities, a decisive funding halt that Dr. Mmusi Maimane champions as a critical intervention against systemic financial mismanagement.
Reacting to the fiscal intervention, the South African Local Government Association (SALGA) acknowledged the deep-rooted structural and systemic financial challenges plaguing the local government sphere. While the association recognizes that the Treasury’s move is intended to enforce sound financial management and accountability, SALGA cautioned that freezing the equitable share must carefully weigh compliance goals against the practical realities of service delivery and overall municipal sustainability.
Dr. Mmusi Maimane, who serves as the chairperson of the Standing Committee on Appropriations, offered a starkly contrasting viewpoint. His portfolio exercises direct oversight over the National Treasury, and he views the funding suspension as an absolutely crucial step.
Maimane did not mince words, describing the misappropriation of these funds as “criminal” given that the equitable share is specifically calculated to assist the indigent population with essential services like water and electricity. He argued that allowing a consequence-free environment to persist is far more damaging to vulnerable communities than the temporary loss of state funding.
According to the committee chairperson, the compliance demands set by the Treasury are not overly burdensome. He cited the City of Johannesburg to illustrate his point, noting that basic administrative transparency—such as making the Eskom distributor agreement public to verify that revenue collection mechanisms are functioning correctly—has been neglected. “Missing the basics is fundamentally criminal,” he asserted.
Beyond the immediate funding freeze, Maimane exposed severe fractures within the country’s intergovernmental relations framework. He argued that when local governments fail, the provincial MEC for cooperative governance is mandated to step in. Instead, he observed that political accountability is frequently outsourced to party headquarters rather than being enforced through proper legislative channels. He insisted that MECs must be held responsible and that SALGA needs to actively ensure governance frameworks are actually followed.
Highlighting specific institutional failures, Maimane pointed to Mangaung, which has languished under oversight for the past 18 months without meaningful provincial or national intervention. He also referenced Johannesburg’s reliance on a presidential task team, noting that a multitude of overlapping players have failed to enforce simple governance standards. He described the Treasury’s current funding suspension as a necessary last resort and a highly positive development.
Maimane revealed that his committee previously summoned both Mangaung and Johannesburg to explain their planning for bulk infrastructure, electricity, and water. In both cases, he found that fundamental governance issues—such as municipal manager vacancies and severe staffing crises in Mangaung—had been completely ignored.
Addressing concerns that the freeze might trigger an intergovernmental crisis or lead to municipalities litigating against the Treasury, Maimane clarified that the withheld funds are not permanently lost. He outlined a straightforward compliance roadmap for the municipalities to recover their equitable share within a two-month window.
He emphasized that the issue is not a lack of state revenue, but a lack of discipline. To restore their funding, municipalities must publish their distributor agency agreements, ensure municipal councils are responsive, properly staff water boards, and appoint highly competent Chief Financial Officers (CFOs).
“These matters are not onerous. They are not complicated. They require discipline,” Maimane stated.
He expressed confidence that if the affected municipalities can demonstrate this compliance pathway over the next two months, the National Treasury will release the funds. Pledging his committee’s full oversight, Maimane promised to ensure the Treasury fulfills its obligations once the municipalities do their part, emphasizing that South Africa can no longer afford to operate within an accountability-free framework.