CAPE TOWN, Western Cape — The National Treasury appeared before Parliament today to address mounting legislative and financial concerns, specifically focusing on South Africa’s strategies to curb illicit money flows and the effectiveness of municipal services spending. As the country works to solidify its financial reputation, lawmakers pressed National Treasury and Financial Intelligence Center representatives on both the enforcement of new anti-money laundering frameworks and the tangible, on-the-ground delivery of local infrastructure.
At the heart of the financial integrity discussion are proposed legislative amendments designed to grant authorities wider powers to access information and investigate suspicious wealth. A primary driver for these regulatory tightenings is the urgent need to ensure South Africa does not slip back onto the Financial Action Task Force (FATF) grey list, following its initial placement in 2023. With another comprehensive international review scheduled for next year, officials emphasized that the window for demonstrating robust compliance is narrowing.
Over the past two years, the National Treasury and financial services regulatory authorities have collaborated to fortify oversight mechanisms. Key priorities detailed during the session include preventing nonprofit organizations from being exploited for terrorism financing, enforcing more rigorous lifestyle audits across government departments and public-facing executives, and advancing Companies Act amendments to better trace corporate funding movements. While some union representatives at the briefing noted that certain proposed regulatory roles overlap with existing mandates, the consensus was clear: the implementation of these recommendations must be fast-tracked by March or April of next year to secure the country’s financial standing.
Shifting focus to local governance, the parliamentary interrogation also scrutinized the management of conditional grants allocated to provinces and municipalities for critical infrastructure, including water, roads, and housing. This particular briefing had been postponed earlier in the month after the National Treasury submitted its presentation late, with the fourth-quarter spending report still in the finalization stages. Consequently, officials presented third-quarter data for the 2025/26 financial year, alongside the new 2026/27 financial year allocations that commenced in July.
While National Treasury representatives highlighted measurable improvements in the rate at which municipalities are utilizing their conditional grants, Members of Parliament (MPs) pushed back with stark realities. Lawmakers pointed to persistent, recurring obstacles, most notably chronic underspending. Because unspent conditional grant funds must be returned to the national kitty, this inefficiency directly deprives communities of essential services. Additional hurdles cited during the session included systemic compliance failures and inefficient contract management at the local level.
To illustrate the severity of the issue, data regarding the Eastern Cape’s human settlements development grant for the 2025/26 financial year was presented. Of the 3.231 billion allocated in the first quarter, a mere 24.4% of those funds had been deployed to actual projects.
In light of these figures, MPs strongly urged the National Treasury to evolve its oversight approach. Lawmakers argued that officials must look beyond basic expenditure metrics and actively assess the quality and impact of the spending. This includes enforcing strict compliance measures throughout the procurement lifecycle, ensuring the verified inclusion of small businesses, and investigating whether funds explicitly earmarked for critical services like electricity and road maintenance are instead being absorbed by municipal salary budgets. The overarching demand from Parliament remains clear: financial compliance must translate into visible, functional service delivery for citizens.
