PARLIAMENT TIES R7.1 BILLION MUNICIPAL RELEASE TO STRICT COMPLIANCE DEADLINES
South Africa’s National Treasury will release the remaining R7.1 billion in withheld July equitable share transfers to 49 municipalities on 31 July 2026, a decision three parliamentary oversight committees have welcomed, provided municipalities meet a structured set of accountability conditions.
The Portfolio Committee on Cooperative Governance and Traditional Affairs (COGTA), the Standing Committee on Public Accounts (SCOPA), and the Standing Committees on Finance and Appropriations announced their conditional support following a joint media briefing by the National Treasury and the Department of COGTA on Tuesday, 29 July 2026. The release represents a deliberate shift in how fiscal enforcement is applied to local government, one the committees had previously directed the departments to adopt.
Minister of Finance Enoch Godongwana outlined the rationale at the briefing: funds would flow to communities while municipal leadership remains accountable for the institutional weaknesses that triggered the withholding under the constitutional section 216(2) process.
Dr Zweli Mkhize, Chairperson of the Portfolio Committee on COGTA, framed the decision as a response to parliamentary concern that indigent households must be shielded from the consequences of administrative failure. He was direct about the limits of that protection. “Releasing the funds must, however, not suspend accountability or allow responsible officials and office-bearers to escape accountability for their role in governance failures,” Dr Mkhize said.
The compliance framework is the mechanism that holds those two objectives together. Municipalities face reporting and implementation deadlines running from 30 September through 30 November 2026. Within that window, affected local governments must demonstrate measurable progress toward compliance, conduct investigations into governance failures, pursue disciplinary action against responsible officials, recover losses, and, where warranted, institute criminal proceedings. The deadlines are firm.
Oversight responsibility extends well beyond the municipalities themselves. The South African Local Government Association, provincial premiers, provincial governments, MECs responsible for finance and cooperative governance, provincial treasuries, and the municipalities will all participate in the compliance and support structure. The committees view this multi-sphere arrangement as essential: accountability cannot rest at one level of government alone.
Meanwhile, the National Treasury and COGTA have committed to building stronger early-warning systems for distressed municipalities and to ending the approval of unfunded municipal budgets, a practice the committees identify as a long-standing driver of service delivery dysfunction. Songezo Zibi, Chairperson of SCOPA, noted measurable progress on that front. The number of municipalities operating with unfunded budgets has already declined from 113 to approximately 76 under Minister of COGTA Velenkosini Hlabisa’s direction. “We welcome this and support the intention to reduce this number to zero over two years,” Mr Zibi said.
The committees have directed that Treasury and COGTA demonstrate, through this joint approach, that the framework protects services, supports structurally distressed municipalities, and holds defaulters accountable. That directive echoes a position the committees established at an earlier meeting: fiscal enforcement must be lawful, transparent, and paired with institutional support rather than deployed as a standalone recovery tool.
The committees also welcomed a commitment from the departments to apply equivalent enforcement measures to national and provincial government departments that owe money to municipalities. Dr Mkhize indicated the committees would seek further detail on how that cross-sphere accountability mechanism will operate in practice. Uniform accountability across all levels of government has been a standing parliamentary expectation, and this undertaking is the first concrete step toward it.
The National Treasury submitted its report on the implementation of Section 216(2) of the Constitution this week, fulfilling a request from the committees’ previous meeting. That report will now inform ongoing parliamentary oversight of municipal fiscal management and the effectiveness of the enforcement tools being applied.
Whether the compliance deadlines produce the disciplinary outcomes and governance corrections the committees have demanded, or whether further withholding becomes necessary before the two-year budget-correction target is reached, remains the open question Parliament will be watching through the end of November.
For additional information, Media Officer Alicestine October at Parliamentary Communication Services can be reached at 083 665 4345 or [email protected]. The official statement is available at https://www.parliament.gov.za/press-releases/media-statement-committees-welcome-equitable-share-release-and-continued-municipal-compliance-measures.