National Treasury will release R7.1 billion in municipal equitable share transfers on Friday, 31 July 2026, despite municipalities failing to meet compliance requirements. Finance Minister Enoch Godongwana said the move is necessary to ensure basic services are not disrupted in struggling communities. The funds had been withheld over governance and financial management failures, but Treasury said continuing to withhold them would risk further deterioration in service delivery.
Twenty municipalities have received their full equitable share to date. Forty-nine municipalities will receive their outstanding equitable share on Friday, of which 21 have already partially received. The decision comes as the Free State remains one of South Africa’s worst-run provinces in local government, with municipalities crippled by financial mismanagement, mounting debt, crumbling infrastructure and an inability to provide even the most basic services.
Funds released not because of compliance In a joint media briefing with National Cooperative Governance and Traditional Affairs (Cogta), Godongwana said the decision to release the funds is to avoid an adverse short- to medium-term effect on the delivery of basic municipal services. This is after the funds have been held for almost a month. The minister further noted that the equitable share is an important source of funding for basic services, particularly services for poor households.
Municipal equitable share provides unconditional national revenue grants to help local governments fund basic services for poor households, subsidise core administrative costs and fulfil their constitutional delivery duties. Funds released on conditional basis Godongwana added that National Treasury must therefore 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. “The release must accordingly be understood as a conditional release, intended to protect basic service delivery while requiring affected municipalities to correct the serious weaknesses identified through the section 216(2) process,” he said.
Godongwana said the municipalities that have not complied with the necessary requirements are not off the hook and will be required to perform. “Each municipality will receive a letter infor…
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