The Merafong City Local Municipality has been flagged by Finance Minister Enoch Godongwana as one of 39 municipalities at risk of severe national intervention due to ballooning water debt. According to a letter issued by the minister on June 30, Merafong owed Rand Water more than R1.3 billion, a debt so large that it threatens the financial stability of the water board itself.

In response, Minister Godongwana has recommended invoking Section 216(2) of the Constitution, alongside Section 38 of the Municipal Finance Management Act. This action would allow the national government to withhold Merafong’s Equitable Share and conditional grants, and redirect these funds to settle the municipality’s debt with Rand Water.

While the move could ease pressure on Rand Water, it would plunge Merafong into deeper financial crisis, severely limiting its ability to provide basic services.

“This measure is just one of several government interventions being implemented to find a sustainable solution for the 39 struggling municipalities,” the minister stated. Other steps include invoking Section 139(5) of the Constitution, which mandates provincial intervention in municipalities facing persistent financial distress and failure to fulfil basic service obligations.

If this section is implemented, the provincial executive committee (PEC) will be compelled to step in to facilitate Merafong’s financial recovery and turnaround.

At this stage, it remains unclear whether Merafong has managed to pay off any portion of the outstanding R1.3 billion debt since the letter was issued.

The looming intervention places Merafong among the most financially troubled municipalities in South Africa, raising concerns over the municipality’s long-term viability and its ability to serve residents.