South Africa: Committees Welcome Equitable Share Release and Continued Municipal Compliance Measures

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The joint oversight committees of Parliament that recently considered National Treasury’s withholding of equitable share transfers to selected municipalities on Tuesday welcomed the announcement that the remaining R7.1 billion in withheld July equitable share transfers will be released to 49 municipalities on 31 July 2026.

The Portfolio Committee on Cooperative Governance and Traditional Affairs (COGTA) and the Standing Committees on Public Accounts, Finance and Appropriations noted the announcement made at a joint media briefing of National Treasury and the Department of COGTA.

The committees were particularly encouraged by the Treasury’s and the department’s recognition that communities should not be subjected to undue hardship due to municipal officials’ governance failures. During their recent joint meeting with the departments, the committees directed that delivery of basic services must be protected throughout this process. The Minister of Finance, Mr Enoch Godongwana, during Tuesday's media briefing, said the release was conditional and intended to protect basic service delivery while requiring affected municipalities to correct the serious weaknesses identified through the section 216(2) process.

The Chairperson of the Portfolio Committee on COGTA, Dr Zweli Mkhize, noted that this announcement responds to the joint committees’ concern that service delivery, particularly to indigent households, must be protected at all costs. “Releasing the funds must, however, not suspend accountability or allow responsible officials and office-bearers to escape accountability for their role in governance failures,” he said.

Dr Mkhize added that the committees are therefore encouraged by the departments’ assurance that a structured compliance programme will accompany the release. This programme includes strict reporting and implementation deadlines from 30 September until 30 November 2026 for municipalities to show progress towards compliance, conduct investigations, pursue disciplinary processes, recover losses and, where necessary, institute criminal proceedings.

The committees welcomed the fact that the compliance programme will also involve the South African Local Government Association, premiers, provincial governments, MECs responsible for finance and cooperative governance, provincial treasuries and municipalities.

The joint committees also welcomed the departments’ commitment to establish stronger early-warning systems and provide targeted support to distressed municipalities. “We are particularly encouraged by the undertaking to end the practice of adopting unfunded municipal budgets,” said Chairperson of SCOPA, Mr Songezo Zibi.

“This undertaking, together with support from National Treasury, COGTA and provincial institutions to help municipalities remove unaffordable and non-essential expenditure, will go a long way towards arresting persistent municipal dysfunction,” he said.

Mr Zibi also welcomed Minister of COGTA Mr Velenkosini Hlabisa’s indication that the number of municipalities with unfunded budgets had already declined from 113 to approximately 76. “We welcome this and support the intention to reduce this number to zero over two years,” said Mr Zibi.

The commitment to apply similar enforcement measures to national and provincial government departments that owe money to municipalities was also welcomed. The committees previously emphasised that accountability must apply across all spheres of government. “We note the ministers’ remarks that the next step is to apply a similar approach to national and provincial government departments that owe money to municipalities,” said Dr Mkhize, adding that the committees would seek more details on this.

The committees also acknowledged receipt of a report requested at their previous meeting. National Treasury submitted the report on the implementation of Section 216(2) of the Constitution this week. Dr Mkhize said that National Treasury and COGTA will be expected to demonstrate that the new joint approach protects services, supports structurally distressed municipalities and holds defaulters and responsible individuals accountable.

“The new approach announced today reflects the committees’ earlier directive that fiscal enforcement must be lawful, transparent and accompanied by support rather than treated as the sole municipal recovery mechanism,” he said.

Distributed by APO Group on behalf of Republic of South Africa: The Parliament.