NATIONAL TREASURY RELEASES WITHHELD EQUITABLE SHARE ALLOCATIONS TO PROTECT BASIC MUNICIPAL SERVICES
BY: CHANON LECODEY MERRICKS | ONLINE EDITOR
NATIONAL TREASURY RELEASES WITHHELD EQUITABLE SHARE ALLOCATIONS TO PROTECT BASIC MUNICIPAL SERVICES
PRETORIA, SOUTH AFRICA – Minister of Finance Enoch Godongwana has announced that National Treasury will release the remaining withheld July 2026 Local Government Equitable Share allocations starting 31 July 2026.
The decision comes as National Treasury approaches the 30-day statutory limit under Section 216(2) of the Constitution and the Municipal Finance Management Act (MFMA), prioritizing the protection of poor households from immediate service delivery disruptions.
Conditional Release: Compliance Still Lacking
The Minister emphasized that the unfreezing of funds does not signify compliance or exonerate affected municipalities from legislative governance standards:
Identified Weaknesses: Treasury assessments revealed systemic failures in handling Unauthorised, Irregular, Fruitless, and Wasteful Expenditure (UIFWE), weak financial misconduct investigations, and a lack of consequence management across Municipal Councils, accounting officers, and Municipal Public Accounts Committees (MPACs).
Unrealistic Budgets: The immediate financial strain felt by councils during the withholding period exposed severe gaps between municipal budget assumptions and actual cash resources, collection rates, and bulk service obligations.
Breakdown of Municipal Allocation Status
Out of the councils subject to enforcement under Section 216(2):
| Category | Number of Municipalities |
| Full Allocation Received | 20 Municipalities |
| Partial Allocation Received to Date | 21 Municipalities |
| Non-Compliant (Zero Received to Date) | 28 Municipalities |
| Releasing Remaining Tranches on 31 July 2026 | 49 Municipalities |
Roadmap to December 2026 Tranche & Compliance Deadlines
To prevent a recurrence of funds being withheld ahead of the December 2026 and March 2027 equitable share cycles, National Treasury is instituting a structured compliance monitoring program:
30 September 2026 — Quarterly Reporting Submission: Affected municipalities must submit quarterly financial reports along with supporting evidence demonstrating measurable progress in processing and reducing UIFWE balances.
31 October 2026 — Legal Processing Verification: Municipalities must prove that all outstanding financial misconduct matters logged as of 30 June 2026 have been formally submitted to required legal and disciplinary channels.
30 November 2026 — Consequence Management Conclusion: Councils must demonstrate a clear, documented increase in finalized cases—including disciplinary proceedings, financial recoveries, and criminal referrals—prior to the December allocation review.
"National Treasury must balance its constitutional responsibility to enforce financial management requirements with the need to avoid communities carrying the immediate consequences of failures by municipal institutions and officials." — Enoch Godongwana, Minister of Finance
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