The AbaQulusi Local Municipality is one of several municipalities across South Africa that will not receive its full July funding from the National Treasury after concerns were raised about the way public money is being managed.

Treasury withholds July payment

In a statement released today (Tuesday), the National Treasury said it is temporarily withholding the July 2026 equitable share payment to selected municipalities. The equitable share is money that national government pays to municipalities every month to help them provide basic services such as water, sanitation, electricity and other essential services.

AbaQulusi is one of five municipalities in KwaZulu-Natal affected by the decision. Treasury said the move follows repeated failures by some municipalities to comply with the Municipal Finance Management Act, despite receiving support, guidance and training over several years.

Financial management under scrutiny

According to the Treasury, the decision is meant to encourage municipalities to improve the way they manage public funds and to hold officials accountable where money has been spent incorrectly or wasted.

The Treasury said municipalities were warned in advance and were given the opportunity to explain why their funding should not be withheld before the decision was made.

It also stressed that the measure is temporary and is not intended as a punishment. Because the funding is only being withheld for a short period, Treasury said it does not expect service delivery to be affected immediately.

Concerns over municipal finances

Treasury said many municipalities continue to struggle with basic financial management. These include approving budgets they cannot afford, failing to deal with money that was spent illegally or wastefully, and not paying creditors such as Eskom, water boards and other organisations on time.

The statement also says some municipalities have failed to investigate cases where public money was spent improperly or to take action against those responsible. In many cases, there has been little evidence that officials have faced disciplinary action or that losses have been recovered.

Funding to be released once conditions are met

The announcement follows the release of the Auditor-General’s latest local government audit report, which found that municipalities across the country continue to lose billions of rand through unauthorised, irregular and wasteful spending. Many also owe large amounts of money to Eskom and water boards.

National Treasury said the withheld funding will be released once municipalities meet the required conditions and prove that they have addressed the problems identified.

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