Treasury is withholding July 2026 equitable share transfers from 69 municipalities, including the City of Johannesburg, Mangaung, Buffalo City and Nelson Mandela Bay, for councils that have failed to clean up their finances despite repeated warnings and support.

In a statement issued on Tuesday, Treasury said the funding freeze was meant to force municipalities to confront long-standing financial failures. It did not mention the rand values of the transfers being withheld. 

It said many municipalities were still failing to comply with the Municipal Finance Management Act (MFMA) in areas “insofar as they relate to adopting funded budgets, addressing UIFWE (Unauthorised, Irregular, Fruitless and Wasteful Expenditure) and ensuring that statutory commitments are met when due,” while some had “failed to show that consequence management is being implemented”.  

It said the aim was “to instil fiscal discipline and ensure that public money is properly managed”. 

Municipalities affected by the

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The KwaZulu-Natal Treasury said on Tuesday that more than R1.7 billion of the R2.1 billion owed to Ithala SOC Limited depositors has been paid since December, as provincial and national authorities work to finalise outstanding legal agreements by 30 June.

KZN Finance MEC Francois Rodgers and Treasury head Carol Coetzee met Finance Minister Enoch Godongwana, South African Reserve Bank Deputy Governor Fundi Tshazibana and Financial Sector Conduct Authority commissioner Unathi Kamlana in Pretoria last week.

The talks focused on delays in concluding agreements regarding Ithala, including depositor repayments and the settlement of the government guarantee.

“We are encouraged by the significant strides made in repaying Ithala depositors and the strong collaboration among all stakeholders. Our focus remains on ensuring that all legitimate depositors receive their funds as quickly as possible, while upholding strict governance and accountability,” Rodgers said.

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The National Treasury has confirmed it will make up to R2.2 billion available to repay around 250 000 Ithala depositors, marking the first major breakthrough in a financial crisis that left thousands of KwaZulu-Natal residents without access to their savings since January 2025.

The provincial government confirmed on Wednesday that the payout process will begin on Monday, 8 December.

This follows months of negotiations between the KZN government of provincial unity, the National Treasury, the Office of the President, and the Prudential Authority.

Depositors’ access to funds was blocked after the Prudential Authority applied to the Pietermaritzburg High Court in January 2025 for the provisional liquidation of Ithala SOC Limited.

The Prudential Authority’s repayment administrator and subsequent court processes resulted in depositors’ accounts being frozen.

Treasury’s R2.2 billion allocation enables depositors to be repaid but does not in itself halt the liquidation application, which remains pending, with

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