Cape Town – Finance Minister Enoch Godongwana has announced that the National Treasury will begin releasing the remaining withheld July 2026 Local Government Equitable Share allocations from Friday, 31 July, saying the decision is aimed at protecting essential municipal services rather than rewarding poor financial management.
The funds had been withheld from municipalities that failed to comply with financial governance requirements. Godongwana said the decision to release the allocations was taken to ensure that residents do not bear the brunt of governance failures.
“Municipalities received full equitable share to date of the 69 municipalities. Forty-nine municipalities will receive their outstanding equitable share on Friday, 31 July 2026, of which 21 have already received part of their equitable allocation. Twenty-eight will receive the full allocation for the first time on Friday.”
Godongwana expressed that the move should not be interpreted as a relaxation of Treasury’s oversight, but rather as a measure to prevent disruptions to basic service delivery.
“We are taking this precautionary step in order to make sure that this withdrawal does not impact negatively on service delivery. That’s the main purpose,” he said.
He said the release of the funds would be accompanied by strict conditions, with each affected municipality required to meet specific governance and financial management targets.
The minister added that provincial governments would work alongside National Treasury to monitor compliance with these conditions over the next six months.
“We’re giving each municipality conditions, and that municipality must comply with those conditions. We’re also working with the provinces to ensure those conditions are met,” he added.
Godongwana concluded by warning that municipalities that fail to comply by December, when the next tranche of equitable share funding is due, could once again face financial sanctions.
“If those municipalities don’t meet those conditions by December, when their next tranche is due, we will still impose a Section 216.”
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Compiled by Glaan Sibuyi
