National Treasury Freezes Equitable Share Funding for Struggling Municipalities
Several municipalities across the North West province are grappling with a financial freeze as the national Department of Treasury has withheld their equitable share funding.
Among the affected is the Dr Ruth S. Mompati District Municipality, which faces the suspension of vital funds due to a crippling R900 million debt to Magalies Water.
In an official letter sent to the municipality, Treasury instructed them to settle outstanding debts with service providers, including the Magalies Water, before any funding would be released. The department also mandated the municipality to clear workers’ provident fund arrears, making it a precondition for receiving the withheld equitable share.
This action forms part of a larger crackdown on financial mismanagement within various municipalities. Other municipalities also face similar conditions before they can access their equitable share funding. The affected municipalities are:
1) Ngaka Modiri Molema District Municipality
2) Ditsobotla Local Municipality
3) Kgetleng Rivier LM
4) Ratlou LM
5) Tswaing LM
6) Naledi LM
7) Mamusa LM
8) Lekwa Teemane LM
9) Kagisano Molopo LM
10) Maquassi Hills LM
The municipalities were initially informed about the funding freeze through email communications ftom Treasury.
Following this notice, an urgent virtual meeting was held on Friday via Zoom with the department’s head and municipal managers, along with their CFOs, to discuss the situation. However, the outcome of the meeting remains unclear, leaving many in the affected municipalities uncertain about the next steps.
The withholding of equitable share funding is causing alarm, as it could severely disrupt essential service delivery, including water, sanitation, electricity, and waste management. Municipalities also face the risk of being unable to pay staff salaries, which could lead to significant staff cuts and further strain local governance.
The department’s decision underlines the importance of financial discipline among municipalities, with serious consequences for both residents and the broader socio-economic landscape if issues are not resolved quickly.
