Joburg hit as National Treasury withholds part of July equitable share

The City of Johannesburg has suffered a fresh financial setback after National Treasury temporarily withheld part of its July equitable share allocation amid continued non-compliance with municipal financial management laws.

What Treasury announced

National Treasury said it had partially withheld July equitable share transfers to 69 municipalities across all nine provinces as part of efforts to enforce fiscal discipline and address persistent financial mismanagement. The action was implemented in terms of Section 216(2) of the Constitution, read with Section 38 of the Municipal Finance Management Act, Treasury said.

Treasury described the intervention as corrective rather than punitive and said municipalities had been given notice, opportunities to engage and a platform to send reasons in writing for why their funds should not be withheld. Treasury added that, because the withholding of the funds will be for a short-term period, the National Treasury does not foresee any impact on service delivery.

Local impact and recent cash strains

The announcement comes days after a sheriff attached city assets at the City of Johannesburg over unpaid debts, forcing the temporary closure of the city’s flagship Thuso House Customer Service Centre. The attachment followed the city’s failure to settle R3.4 million owed to creditors.

The city acknowledged the outstanding payment and attributed the delay to system problems.

“Unfortunately, payment was delayed due to system glitches. Arrangements are currently underway with the Sheriff of the Court to return all items that were removed from the offices. The centre will be opened to the public for business as usual once all necessary logistics have been completed. The city apologises to residents for the inconvenience caused.”

Responses from city officials and stakeholders

Johannesburg Mayor Dada Morero said arrangements were under way to recover attached assets and the city apologised to residents for the inconvenience caused. The city did not provide additional comment to IOL following Treasury’s announcement.

Opposition and civic voices framed the withholding as confirmation of deeper financial problems in the metro. ActionSA mayoral candidate Herman Mashaba said:

“National Treasury’s decision to withhold equitable share payments to the City of Johannesburg is yet another indicator that highlights the compounding financial crisis that the city is plunged in.”

Mashaba warned that withholding allocations could negatively affect service delivery and infrastructure projects and questioned how the city had reached its current position after securing a R3.8 billion loan from Germany’s KfW Development Bank earlier this year. He also noted a previous warning from Finance Minister Enoch Godongwana that Treasury could withdraw funding over the city’s R10 billion wage agreement with unions.

Rise Mzansi mayoral candidate Lukhona Mnguni said the decision was “a severe double blow to the City of Joburg, hitting residents at a time when the municipality is already failing to provide basic, essential services.” Mnguni added that Treasury’s assurance did not reflect the city’s financial reality and pointed to deteriorating waste collection and limited Pikitup fleet operations.

Labour federation SAFTU said the move underscored the deepening crisis in local government. Spokesperson Newton Masuku said:

“Corruption, maladministration, financial mismanagement and the looting of municipal resources have devastated service delivery and betrayed millions of working-class and poor communities.”

SALGA expressed qualified support for measures to improve financial accountability while warning about structural financial challenges facing many municipalities. SALGA spokesperson Motaletale Modiba said compliance steps should be balanced against the need to sustain municipal service delivery and noted that Treasury had originally intended to withhold funds from 99 municipalities before reducing the number to 69 following engagements. Modiba highlighted concerns about municipalities failing to pay over statutory deductions such as pension fund contributions, UIF and PAYE.

Wider municipal pressures

SALGA noted that municipal consumer debt had exceeded R480 billion by 31 March 2026, a factor that weakens municipalities’ ability to meet obligations to Eskom, water boards, SARS and other creditors. The withholding affects other Gauteng municipalities including Emfuleni, Lesedi, Sedibeng District Municipality, Merafong City and Rand West City.

Next steps

Deputy Finance Minister Ashor Sarupen was expected to provide further details on the temporary withholding during a media briefing in Pretoria, and Mayor Morero was also expected to brief the media later on the city’s financial position and other challenges facing Johannesburg.