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Municipalities Face R332 Billion Threat Over Faulty Indigent Registers
A stern warning from the government
South Africa’s municipalities have been given a clear message: clean up your indigent registers or risk losing billions in national funding. Finance Minister Enoch Godongwana and Cooperative Governance Minister Velenkosini Hlabisa have jointly cautioned that unless municipalities urgently correct serious mismatches in their data, they may see their share of R332.4 billion withheld.
At the centre of the issue are registers that list households eligible for free basic services such as electricity, water, and sanitation. These records determine how much funding each municipality receives from the Local Government Equitable Share (LGES), a key mechanism that ensures poorer households are supported.
The numbers do not add up
The ministers highlighted a troubling gap between municipal figures and national data collected by Statistics South Africa (Stats SA). According to Stats SA, more than 11 million households qualify as indigent. Yet only 2.8 million are recorded in municipal registers. This leaves over 8 million households unaccounted for, despite municipalities still receiving subsidies intended for them.
The implication is stark. Municipalities may be drawing money for free basic services without properly recording or delivering them to millions of households that qualify.
Why this matters to ordinary people
For many South Africans, particularly in townships and rural communities, indigent registers are the gateway to essentials they cannot afford to pay for. Without accurate records, poor households risk being overlooked, while municipalities continue to benefit financially.
This has fuelled frustration on the ground. Social media reactions show residents demanding transparency, with some accusing municipalities of exploiting loopholes for financial gain. The warning from the national government is being seen as a long-overdue push for accountability.
The September deadline
To fix the problem, municipalities must submit detailed plans and credible updated indigent registers to both the National Treasury and Cogta by 30 September. They must also provide monthly progress reports. Failure to do so could result in the December 2025 tranche of funding being withheld, in line with section 216(2) of the Constitution.
The warning carries weight since the LGES is the main unconditional grant used to keep basic services running in cash-strapped municipalities. Over the next three years, more than R332 billion is earmarked for this purpose. If funding is cut, already struggling municipalities could find themselves unable to maintain even the most basic of services.
A test of political will
The pressure now lies with municipal leaders. For years, indigent registers have been plagued by outdated data, underreporting, and a lack of auditing. The ministers’ hard stance signals that this cycle can no longer continue. Whether municipalities can respond in time will determine if millions of South Africans continue to benefit from free basic services or if the money is pulled back by Treasury.
Also read: Zuma and MK Party Lose Urgent Court Bid Against Madlanga Commission
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Source: IOL
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