<\/p>\n
Nelson Mandela Bay\u2019s worsening infrastructure challenges have come under renewed scrutiny after National Treasury temporarily withheld the metro\u2019s July equitable share allocation, raising fresh concerns among business leaders about the city\u2019s ability to foster investment and economic growth.<\/p>\n
The metro is one of around 70 municipalities whose July 2026 equitable share transfers have been withheld by National Treasury due to persistent non-compliance with the Municipal Finance Management Act (MFMA).<\/p>\n
Read:
Godongwana withholds July funds to Jhb, 70 municipalities nationwide
Withholding R13.5bn for mismanaged municipalities won\u2019t hit services, says Treasury<\/p>\n
Treasury said the intervention is intended to improve financial governance, strengthen accountability and ensure that municipalities properly address unauthorised, irregular, fruitless and wasteful expenditure.<\/p>\n
Denise van Huyssteen, CEO of the Nelson Mandela Bay Business Chamber, says the intervention is disappointing \u2013 but that the metro\u2019s \u201cnon-performance\u201d related to expenditure \u201chas become a recurring pattern that continues to result in lack of service delivery and maintenance of critical electricity, water, sanitation and roads infrastructure\u201d.<\/p>\n
She says the deterioration of municipal infrastructure is becoming increasingly visible across the metro and risks weighing on business confidence.<\/p>\n
\u201cFurthermore, this urban decay and continued regression are visible in many parts of the metro, which does not bode well for investor confidence.<\/p>\n
\n\u201cA lack of an enabling environment makes it extremely difficult for businesses to operate and to maintain investment and employment in the metro.\u201d<\/p>\n<\/blockquote>\n
National Treasury gave affected municipalities prior notice and an opportunity to explain why their allocations should not be withheld before the decision was implemented.<\/p>\n
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It said many municipalities continue to struggle to adopt funded budgets, address unauthorised, irregular, fruitless and wasteful expenditure, and meet their statutory obligations.<\/p>\n
It warned that weak financial governance threatens the sustainability of key service providers such as Eskom and water boards, while disrupting service delivery through delayed payments and governance failures.<\/p>\n
Intervention is \u2018corrective\u2019<\/strong><\/p>\n
The Nelson Mandela Bay Municipality has acknowledged the temporary withholding but stressed that the move should not be interpreted as evidence that it is financially insolvent or unable to deliver services.<\/p>\n
\u201cThe Municipality wishes to assure residents, businesses, investors and all stakeholders that this intervention is administrative and corrective in nature, as confirmed by the National Treasury, and does not constitute a declaration that the Municipality is financially insolvent or incapable of delivering services,\u201d it said.<\/p>\n
The municipality said it respects National Treasury\u2019s oversight role and is working closely with both National Treasury and the Eastern Cape Provincial Treasury to meet the conditions required for the release of the withheld allocation.<\/p>\n
Read:
Nelson Mandela Bay needs to claim its share of tourism\u2019s \u2018low-hanging fruit\u2019
Untapped potential in Nelson Mandela Bay\u2019s decaying state-owned heritage buildings<\/p>\nThe municipality said it has already started implementing a programme of financial governance reforms to strengthen its compliance with the MFMA, improve financial oversight, enhance consequence management and ensure that matters relating to unauthorised, irregular, fruitless and wasteful expenditure are dealt with in accordance with legislation.<\/p>\n
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\nIt said it is prioritising stronger revenue management, tighter expenditure controls and improved governance systems as part of broader efforts to improve its financial sustainability.<\/p>\n<\/blockquote>\n
A dedicated multi-disciplinary team has also been established to engage directly with National Treasury to address the outstanding requirements.<\/p>\n
The municipality said every effort is being made to minimise any impact on operations and service delivery, adding that water, sanitation, electricity, waste management, emergency services and other frontline services remain its top priorities.<\/p>\n
Unfortunate timing<\/strong><\/p>\n
The funding intervention comes at a challenging time for Nelson Mandela Bay\u2019s economy.<\/p>\n
The metro remains one of South Africa\u2019s key manufacturing and automotive hubs, but recent industry reports have highlighted mounting pressure \u2013 including weaker vehicle production due to cheaper Asian imports, increasing competition from imported vehicles, and broader economic headwinds affecting investment and employment.<\/p>\n
Read: Motor city Nelson Mandela Bay is buckling under a tide of Asian imports<\/p>\n
National Treasury said equitable share transfers will resume once the affected municipalities demonstrate compliance with the required conditions and provide evidence that the identified shortcomings have been addressed.<\/p>\n<\/p><\/div>\n
#Treasury #funding #freeze #puts #pressure #Nelson #Mandela #Bay<\/p>\n","protected":false},"excerpt":{"rendered":"
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