South Africa’s Treasury Freezes R13bn for 69 Municipalities Amid Fiscal Discipline Drive BODY: Johannesburg, South Africa – The South African National Treasury has announced a decision to freeze over R13 billion in funding for 69 municipalities across the country. This measure, which is aimed at enforcing fiscal discipline and improving financial management, affects a range of local governments, with the City of Johannesburg facing the brunt of the withholding, with about R3. 6 billion held back.
Treasury officials maintain that this funding freeze will not disrupt service delivery, arguing that most municipalities derive operational funding from their own revenue streams.
However, the move has raised concerns among political parties and residents, who are apprehensive about the potential impact on the economic well — being of millions of South Africans. Ogalaletseng Gaarekwe, Treasury’s Intergovernmental Relations Chief Director, explained that the process of releasing the withheld funds has worked in the past, with all funds released by early August once municipalities met the required conditions. She also noted that the department does not anticipate that the freeze will lead to a disruption in service delivery.
The funding freeze comes in the wake of financial distress faced by several municipalities, many of which heavily rely on national government transfers.
The Free State, the North West, and Northern Cape provinces are among the hardest hit, with a report by EWN indicating that a significant number of municipalities in these provinces are affected. Despite the Treasury’s stance, the potential impact on service delivery remains a major concern, especially in cities like Johannesburg, where financial challenges are acute.
The city is currently facing a shortfall of over R21 billion, according to a leaked letter from Finance Minister Enoch Godongwana.
As South African municipalities grapple with financial mismanagement and governance issues, the Treasury’s decision to freeze funding has sparked a debate on the balance between enforcing fiscal discipline and ensuring the continuity of essential services.
*Additional reporting by ImNews | Sources consulted: 5*
—
This original article was produced by the ImNews editorial team
Source: enca
Source: Nokuthula Khanyile
