The South African Local Government Association (SALGA) has cautioned that the National Treasury’s decision to withhold July equitable share allocations from 69 municipalities should not result in disruptions to essential services for communities.
The warning follows Treasury’s announcement that it had temporarily withheld the municipalities’ July transfers after they failed to meet statutory obligations, including the submission of financial statements and other compliance requirements.
While acknowledging the importance of enforcing financial accountability, SALGA said the withholding of funds should not compromise the delivery of critical municipal services such as water, sanitation, electricity, refuse removal and road maintenance.
SALGA said municipalities have a constitutional obligation to continue providing basic services despite the financial challenges they face.
“The withholding of equitable share allocations must not translate into interruptions in service delivery. Municipalities must continue prioritising the provision of essential services while addressing the compliance matters raised by National Treasury,” the association said.
SALGA also stressed that the latest action by Treasury highlights broader structural and financial challenges affecting local government, which require urgent intervention beyond compliance measures alone.
“The current situation underscores deeper financial and institutional challenges facing municipalities. These require coordinated and sustainable solutions that strengthen governance, improve financial management and ensure municipalities are adequately resourced to fulfil their constitutional mandate,” SALGA said.
The association called for collaborative efforts between municipalities, provincial governments, National Treasury and other stakeholders to address the underlying causes of municipal financial distress.
It said improving revenue collection, strengthening financial management systems, building institutional capacity and supporting struggling municipalities would be critical to restoring financial sustainability across local government.
National Treasury has indicated that the withheld funds may be released once the affected municipalities have complied with the necessary legislative and reporting requirements.
SALGA said it will continue engaging with government and municipalities to ensure compliance issues are resolved as quickly as possible while safeguarding the uninterrupted delivery of services to residents.
Cece Smith 