MUSINA, Limpopo — The National Treasury has placed a freeze on approximately R96 million in equitable share funding destined for the Musina Local Municipality. The financial block was enacted after the local authority failed to clear a R52 million debt owed to Eskom within the statutory 30-day window, triggering a breach of municipal finance regulations.
Addressing the funding shortfall in a recent media interview, Musina Mayor Godfrey Mawela took a moment to clarify his position after being incorrectly introduced as the municipal manager. Mawela confirmed the R96 million withholding, noting that the funds are desperately needed by local residents but remain locked by the national government due to the compliance failure.
Explaining the root cause of the Treasury’s intervention, the mayor pointed to a contravention of Section 65, Subsection 2 of the Municipal Finance Management Act (MFMA). This specific legislative clause mandates that municipalities must settle their creditor accounts within 30 days. Because the local council could not meet this deadline for its Eskom account, the Treasury exercised its right to withhold the equitable share allocation.
Despite the compliance breach, Mawela indicated that a formal repayment arrangement has been established with the power utility. The municipality has officially notified the National Treasury of this agreement. The current strategy hinges entirely on the release of the blocked funds; the mayor stated that once the R96 million is unlocked, the municipality plans to settle the R52 million Eskom arrears by the second week of July.
When pressed on whether the debt stems from poor financial management or inadequate revenue collection from residents, Mawela candidly described Musina as a financially struggling municipality. He noted that the local authority leans heavily on grants and equitable share allocations to manage service delivery backlogs. Regarding revenue collection from residents, he reported a current collection rate of roughly 90%.
However, that 10% shortfall is exacerbated by widespread illegal electricity connections. To combat this revenue leakage, the mayor announced plans to convene a roundtable meeting aimed at resolving the issue of unauthorized power usage by the community.
Furthermore, Mawela highlighted a deeper structural issue with the national power utility, describing the billing and purchasing arrangements as highly complex. He stressed that the municipality does not profit from the millions spent on bulk electricity purchases and urged both provincial and national government spheres to intervene and assist in restructuring the utility relationship to ensure the local authority’s financial sustainability.