Treasury stands firm on funding crackdown as Joburg warns of cash crisis

Political commentator, Goodenough Mashego, says the intervention by National Treasury to withhold funding from 69 financially distressed municipalities, is long overdue, arguing that years of financial mismanagement identified by the Auditor-General have gone largely unpunished.

His comments come after Johannesburg Mayor, Dada Morero, revealed on Thursday that the City of Johannesburg has enough cash to operate for only 12 more days after Treasury withheld part of the city’s equitable share allocation.

Morero says the city has been engaging Treasury in an effort to secure the release of the funds, which were largely earmarked to reduce Johannesburg’s debt to Eskom and Rand Water.

Meanwhile, Treasury is standing by its decision to withhold funding from the municipalities, describing the move as necessary to enforce accountability and restore financial discipline in local government.

Addressing a joint sitting of Parliament’s finance committees on Friday, National Treasury Director-General Duncan Pieterse said the decision marks a shift from monitoring municipalities to taking direct enforcement action.

Pieterse said more than half of South Africa’s municipalities are in financial distress, with mounting irregular, unauthorised, fruitless and wasteful expenditure, alongside billions of rands owed to Eskom, water boards, SARS and pension funds.

He said Treasury first warned municipalities in December last year that funding could be withheld if they failed to address persistent financial failures. Since then, the number of affected municipalities has dropped from 99 to 69 after some complied with Treasury’s demands.

Meanwhile, Mashego says the withheld funding is specifically intended to help municipalities settle debts with bulk service providers, but many have diverted the money to other purposes.

“Treasury allocates money for specific purposes. If money meant to pay Eskom isn’t used for that purpose, residents ultimately suffer because electricity and water services are disrupted despite people paying their municipal bills.”

According to Mashego, the crisis also exposes deeper structural problems within local government, where political appointments often take precedence over professional competence.

“Political parties need to professionalise the administration. Then we wouldn’t have situations like. After all, we would have people who hold Chartered Accounting qualifications become CFOs, people who hold management degrees will become managers, instead of people who are there because they are comrades of the DA or ANC,” he said.

He says accountability should rest primarily with municipal administrators responsible for managing public finances, rather than elected politicians alone.

Treasury has maintained that the withheld funding will only be released once municipalities demonstrate sound financial management, agree to payment plans with creditors, curb unauthorised expenditure and take action against officials responsible for financial misconduct.

📌 WATCH | The Minister of Finance, Enoch Godongwana, and National Treasury Director-General, Duncan Pieterse, provide a status update on the temporary withholding of the July equitable share transfers to 69 municipalities.

🔗 Tune in: https://t.co/dVCE26TvmY #GovZAUpdates… pic.twitter.com/JNPclMOZKm

— South African Government (@GovernmentZA) July 17, 2026