South Africa's National Treasury said on Tuesday it would withhold funds from more than a quarter of the country's municipalities, including economic hub Johannesburg, citing financial mismanagement.
Municipalities finance themselves primarily through property rates and service charges, but also receive an equal share of revenue from the national treasury.
Despite being home to Africa's most affluent square mile, Johannesburg is grappling with the same municipal failings seen in much of South Africa, from burst water pipes and potholes to rising garbage and decaying infrastructure.
The Treasury said it would suspend July transfers to 69 municipalities in all nine provinces “to establish fiscal discipline and ensure proper management of public funds”.
The funding cuts have put pressure on Johannesburg's finances, with the city owing billions of rands to electricity and water utilities and struggling to maintain basic services, including road repairs.
Johannesburg Mayor Dada Morero did not immediately respond to a request for comment.
In May, the finance minister threatened to put a fair share of Johannesburg on hold for July if the mayor failed to scrap a R10.3 billion ($634 million) pay offer made by the council to city workers who wanted to strike last year.
Last year, President Cyril Ramaphosa criticized the situation in the city of six million, describing it as “not very pleasant”.
As well as Johannesburg, funding will be withheld from municipalities including Emfuleni, where the country's second-largest party, the Democratic Alliance, recently won a ward by-election from the African National Congress.
Other affected municipalities include Nelson Mandela Bay and Buffalo City in the Eastern Cape, Mopani in Limpopo province and Mangaung in the Free State province.
The Treasury said the move, taken ahead of local elections in November, is not expected to impact service delivery.
Transfers will resume once affected municipalities have met Treasury's conditions and provide evidence that they have done so. One requirement is a minimum 25 percent reduction in unauthorized, irregular, wasteful and wasteful expenditure.