LIMPOPO – The National Treasury has withheld R300 million from the Mopani District Municipality’s (MDM) July equitable share allocation, a move expected to affect the municipality’s ability to meet several financial obligations.

These include employee salaries, payments to Expanded Public Works Programme (EPWP) workers, pension fund contributions, bulk water purchases, indigent support programmes, and payments to Eskom.

R2.4b budget deficit

The municipality is facing a budget deficit of R2.4 billion and owes approximately R300 million to Lepelle Northern Water (LNW) and R384 million to the Department of Water and Sanitation (DWS).

MDM Mayor Pule Shayi said much of the municipality’s financial difficulties stem from historical debt accumulated between 2009 and 2019.

7 officials dismissed

He said the municipality has been working with the Auditor-General to investigate the matter, resulting in disciplinary action against several officials.

“So far, seven officials have been dismissed, including former chief financial officer Sibongile Mathebula,” Shayi said.

Despite the financial challenges, Shayi maintained that the municipality remains operationally stable and continues to make regular payments to creditors such as LNW and the DWS using revenue it collects.

He expressed confidence that the National Treasury would release the withheld funds after considering the municipality’s report and supporting evidence.

4 Limpopo municipalities affected

Finance Minister Enoch Godongwana announced on Friday, July 10, that National Treasury had withheld funds from 69 municipalities across the country, including four in Limpopo:

• Mopani District Municipality
• Thabazimbi Local Municipality
• Musina Local Municipality
• Fetakgomo-Tubatse Local Municipality

‘A dereliction of fiduciary duties’

Godongwana said the decision was made in terms of Section 216(2) of the Constitution and the Municipal Finance Management Act (MFMA), which allows Treasury to withhold funds from municipalities that repeatedly breach financial management laws.

He said the measure is aimed at enforcing fiscal discipline and protecting public funds. Despite years of support, many municipalities continue to adopt unfunded budgets, incur unauthorised, irregular, fruitless and wasteful expenditure, and fail to pay creditors such as Eskom, water boards, the South African Revenue Service (SARS), the Auditor-General, and pension funds.

The affected municipalities were given prior notice and an opportunity to explain why their allocations should not be withheld.

“Non-compliance with the legislation is not only a dereliction of fiduciary duties by the political and administrative leadership of municipalities, but it also threatens the financial sustainability of bulk suppliers such as water boards and Eskom. Failure to pay third parties further undermines the ability of statutory bodies to operate effectively,” he said.