PRETORIA, South Africa — The National Treasury’s decision to temporarily withhold the equitable share from 69 underperforming municipalities has sparked a fierce debate over financial accountability and service delivery in South Africa. Dr. Mmusi Maimane, Chairperson of the Standing Committee on Appropriations, has strongly defended the funding freeze, arguing that consequence-free mismanagement is far more damaging to vulnerable communities than the temporary suspension of funds.
The South African Local Government Association (SALGA) has pushed back against the Treasury’s move, arguing that the local government sphere requires structural and systemic reform to address deep-seated fiscal challenges. While SALGA acknowledges that the withholding of funds aims to promote sound financial management, the association emphasized that this action must carefully balance compliance objectives with the practical impact on municipal service delivery and overall financial sustainability.
However, Dr. Maimane offered a starkly different perspective, labeling the mismanagement of the equitable share as “criminal.” He explained that the equitable share is specifically designed to provide basic services—such as water and electricity—to the indigent population. When a municipality mismanages these funds, the most vulnerable communities are left without essential services.
“Whilst the argument may hold that National Treasury withholding funds could be devastating to citizens, I actually think that mismanagement is far more damaging,” Maimane stated. He added that operating in a consequence-free environment is the true threat to the public.
According to the committee chairperson, the compliance requirements demanded by the Treasury are not extraordinary. He pointed to the City of Johannesburg as a prime example, noting that basic administrative duties—such as publishing distributor agreements with Eskom to ensure collection mechanisms are properly utilized—have been neglected. “Missing the basics is fundamentally criminal,” he noted.
Dr. Maimane also highlighted severe flaws in the country’s intergovernmental framework. He criticized the growing trend of outsourcing accountability to political party headquarters rather than enforcing legislative interventions. He stressed that Members of the Executive Council (MECs) for Cooperative Governance must intervene when municipalities fail, and that SALGA must actively ensure governance frameworks are adhered to.
To illustrate these systemic failures, Maimane cited Mangaung, which has been under oversight for a year and a half without meaningful intervention from the province or national government. He also pointed to Johannesburg, which has relied on a presidential task team, as evidence that multiple overlapping players have failed to enforce simple governance frameworks. He described the Treasury’s current funding freeze as a “last resort” and a positive development that has been long overdue.
Despite the severity of the intervention, Maimane assured that there is a clear, achievable pathway for municipalities to recoup their withheld funds. He clarified that the issue is not a lack of money, but a lack of discipline. To restore funding, municipalities are required to publish distributor agreements, appoint competent Chief Financial Officers (CFOs), and ensure proper staffing for water management and bulk infrastructure.
“These matters are not onerous. They are not complicated. They require discipline,” Maimane explained.
He expressed confidence that if municipalities can demonstrate compliance within the next two months, the funds will be released. Pledging his committee’s oversight, Maimane promised to ensure the National Treasury fulfills its obligations once municipalities meet the required standards, emphasizing that the country can no longer afford to operate within an accountability-free framework.