Parliament's joint oversight committees recently considered the pausing of equal share transfers to selected municipalities by National Treasury on Tuesday, welcoming the announcement that the remaining R7.1 billion in equal share transfers paused in July 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 Appropriation took note of the announcement made at a joint media briefing by the Department of National Treasury and COGTA.
The Committees were particularly encouraged by the Treasury and the Department's recognition that communities should not suffer undue hardship because of governance failures of municipal authorities. During their recent joint meeting with the departments, the committees directed that the delivery of basic services should be preserved during this entire process. Finance Minister, Mr Enoch Godongwana, said during Tuesday's media briefing that the release was conditional and aimed at protecting basic service delivery while requiring affected municipalities to fix serious vulnerabilities identified through the section 216(2) process.
Chair of the Portfolio Committee on COGTA, Dr Zweli Mkhize, said this announcement responds to the Joint Committees' concern that service delivery, particularly to poor households, must be protected at all costs. “However, the release of funds should not suspend accountability or allow responsible officials and functionaries to escape accountability for their role in governance failures,” he said.
Dr Mkhize said the committees were encouraged by the departments' assurances that the release would be accompanied by a structured compliance programme. The program includes strict reporting and implementation deadlines from 30 September to 30 November 2026 for municipalities to show progress towards compliance, conduct investigations, pursue disciplinary procedures, recover damages and, where necessary, initiate criminal proceedings.
The Committees welcomed the fact that the compliance program would 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 establishing strong early-warning systems and providing targeted assistance to distressed municipalities. “We are particularly encouraged by the undertaking to end the practice of adopting unfunded municipal budgets,” said Mr Songzo Zibi, President of Scopa.
“This undertaking, with the support of National Treasury, COGTA and provincial institutions to help municipalities eliminate ineffective and non-essential expenditure, will go a long way towards curbing persistent municipal dysfunction,” he said.
Mr Zibi also welcomed COGTA Minister Mr Velenkosini Hlabisa's indication that the number of municipalities with unfunded budgets has already reduced from 113 to approximately 76. “We welcome this and support the intention to reduce this number to zero in two years,” Mr Zibi said.
The commitment to impose similar enforcement measures on national and provincial government departments to which municipalities are owed money was also welcomed. The committees had previously stressed that accountability should apply to all areas of government. “We note the ministers' comments that the next step is to apply a similar approach to national and provincial government departments that owe municipalities money,” Dr Mkhize said. He said that the committees will ask for more information on this.
The Committees also confirmed receipt of the report requested at their last meeting. The National Treasury this week presented a report on the implementation of section 216(2) of the Constitution. Dr Mkhize said 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 persons accountable.
“The new approach announced today reflects the Committees' earlier guidance that fiscal enforcement should be legitimate, transparent and well-supported, and not treated as the sole municipal recovery mechanism,” he said.
Distributed by APO Group on behalf of the Republic of South Africa: Parliament.
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