Finance Minister Enoch Godongwana has announced that National Treasury will release the remaining withheld July 2026 Local Government Equitable Share transfers to affected municipalities from 31 July 2026.
The funds were initially withheld under Section 216(2) of the Constitution because of concerns over poor financial management, including unauthorised, irregular, fruitless and wasteful expenditure, weak governance, and failures in accountability. Treasury said the release does not mean municipalities have complied with legal requirements, but aims to prevent disruptions to essential services for communities.
Of the affected municipalities, 20 received their full allocations, while 49 will receive outstanding payments on 31 July. Municipalities must now meet strict reporting and governance requirements ahead of the December 2026 equitable share allocation or risk having future transfers withheld.
National Treasury said affected municipalities will be closely monitored over the coming months and must submit quarterly progress reports by 30 September 2026. They are also expected to improve investigations into financial misconduct, strengthen disciplinary processes, and demonstrate measurable progress in reducing unauthorised, irregular, fruitless and wasteful expenditure. Treasury warned that municipalities failing to meet these conditions could face another withholding of equitable share allocations in December 2026 and March 2027.
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