The City of Johannesburg (CoJ) has failed to avert another cash crunch after National Treasury confirmed on Tuesday morning that it will withhold a portion of the July equitable share allocation to South Africa\u2019s biggest metro, and more than 70 other municipalities across the country.<\/p>\n
This is despite confidence by CoJ Mayor Dada Morero and other executives that they would get budget plans over the line that would prevent Finance Minister Enoch Godongwana from invoking Section 216 of the Constitution.<\/p>\n
Read:\u00a0Clock is ticking as Godongwana gives CoJ new notice over funding cuts<\/p>\n
National Treasury said on Tuesday it was in the process of temporarily withholding the July 2026 equitable share transfers to selected municipalities in what it said is a bid to:<\/p>\n
- \n
- Instil fiscal discipline and ensure that public money is properly managed;<\/li>\n
- Ensure that unauthorised, irregular, fruitless and wasteful expenditure (UIFWE) is addressed; and that<\/li>\n
- Municipal officials and office-bearers are held accountable where required by law.<\/li>\n<\/ul>\n
Other major metro cities that have seen a temporary withholding of equitable share funding include Nelson Mandela Bay and Buffalo City in the Eastern Cape, and Mangaung in the Free State.<\/p>\n
The decision follows persistent serious non-compliance with the Municipal Finance Management Act (MFMA) and its supporting regulations, despite support provided by the National Treasury through guidance, engagement, and formal or informal communication.<\/p>\n
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Treasury\u2019s move comes just days after Moody\u2019s Ratings surprise move to up CoJ ratings outlook in-line with SA\u2019s national credit rating over the weekend.<\/p>\n<\/blockquote>\n
Moneyweb previously reported on Godongwana\u2019s warnings to Joburg Mayor Morero, including a letter where the head of fiscal policy censured city officials over the municipality\u2019s fragile finances and poor governance.<\/p>\n
On 19 June 2026, Godongwana gave Joburg seven days to table reasons why funds should not be withheld.<\/p>\n
Read\/listen:
Joburg sets sights on Moody\u2019s upgrade after positive outlook
Johannesburg faces R2.1bn funding gap as its bills mount
How Moody\u2019s rates Joburg\u2019s financial outlook after its review
City of Joburg defends recovery amid cash flow concerns<\/p>\nWhile a plan was tabled at the Johannesburg City Council, insiders were unable to confirm to Moneyweb if a reply to Godongwana was made in time.<\/p>\n
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Joburg\u2019s financial crisis has long been documented, including concerns over Morero\u2019s defiance to withdraw an expensive R10 billion wage deal with the South African Municipal Workers\u2019 Union (Samwu).<\/p>\n<\/blockquote>\n
Despite an unfunded budget, which will see expenditure surpass foreseeable revenue, Morero and other city officials don\u2019t believe there\u2019s a crisis.<\/p>\n
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Joburg and others<\/strong><\/p>\n
The latest decision by National Treasury again puts the CoJ among more than 70 municipalities that will not receive the full July allocation. This makes up almost 30% of the country\u2019s total 257 municipalities.<\/p>\n
In Gauteng, the Treasury\u2019s \u2018withholding list\u2019 also includes Emfuleni, Lesedi, Sedibeng District Municipality, Merafong City, and Rand West City.<\/p>\n
The full national list is below:<\/p>\n
![\"National](\"https:\/\/www.moneyweb.co.za\/wp-content\/uploads\/2026\/07\/mun-555x225.png\")
<\/p>\nSource: National Treasury<\/p>\n<\/div>\n
\u201cThe municipalities have been given sufficient notice in writing and urged to take measures to change their financial management positions ahead of the withholding of funds. They were also given a platform to send, in writing, reasons why their funds should not be withheld,\u201d National Treasury said in a 3-page statement.<\/p>\n
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\u201cIt is important to note that this is a corrective rather than punitive measure. Because the withholding of the funds will be for a short-term period, the National Treasury does not foresee any impact on service delivery.\u201d<\/p>\n<\/blockquote>\n
It added that non-compliance with the legislation is not only a dereliction of fiduciary duties by the political and administrative leadership of municipalities, but it is also threatening the financial sustainability of bulk suppliers (water boards and Eskom).<\/p>\n
Listen\/read:<\/p>\n
Mr Mayor, in what city do you live?<\/div>\nJoburg not absolved from its obligations to pay Eskom \u2013 Ramokgopa<\/div>\n\u201cIn addition, failure to pay third parties negatively impacts on the ability of statutory bodies to continue operating optimally,\u201d it said.<\/p>\n
Treasury has again sounded the alarm on the latest Auditor General\u2019s 2024\/25 report on local government audit outcomes, which includes concerns that since 2021, municipalities have incurred a total of R24.1 billion in fruitless and wasteful expenditure; that budget credibility continued to deteriorate and that by the 2024\/25 year-end, municipalities owed interest of R3.4 billion to Eskom and R1.2 billion to water boards.<\/p>\n
\u201cTransfers will resume once the affected municipalities meet the required conditions and submit proper proof of the conditions being met,\u201d Treasury said.<\/p>\n<\/p><\/div>\n
#Godongwana #withholds #July #funds #Jhb #municipalities<\/p>\n","protected":false},"excerpt":{"rendered":"
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