News

KZN May Freeze Funding to Mismanaged Municipalities

Published

2 months ago

August 8, 2025

Chiraag

KZN municipal debt 2025, Francois Rodgers, Section 216(2) Constitution, municipal finance management, KZN Treasury action, MFMA violations, Joburg ETC

Billions unpaid, rule-breaking, and no progress, KZN’s municipalities may soon feel the cash squeeze

KwaZulu‑Natal Finance MEC Francois Rodgers is gearing up to recommend that Section 216(2) of the Constitution be triggered, a move that could halt transfers of public funds to municipalities that continue to flout financial norms. This follows the alarming findings of the province’s latest quarterly budget review.

So, How Bad Is It?

Municipal debt in KZN spiralled from R64.3 billion in Q3 to R67.1 billion in Q4, a staggering R2.8 billion increase in just a few months. Even more jarring, R56.6 billion of that is older than 90 days.

To add fuel to the fire, R6 billion, nearly two-thirds, of municipal dues are more than 30 days overdue, typical grounds for violating the Municipal Finance Management Act (MFMA).

Where Are Things Going Wrong?

More municipalities are clocking serious financial red flags, rising from 17 in Q3 to 20 in Q4. Rodgers pinpointed core failures:

Supply chain mismanagement
Poor debt collection and credit control
Widespread non‑compliance with SCM norms outlined in Sections 138 and 140 of the MFMA.

KZN Treasury insists it’s not standing by idly, offering technical support, SCM training, and helping set up disciplinary boards. Yet, Rodgers says in at least one municipality, cooperation was so scant that resources had to be redirected.

What Is Section 216(2)?

It’s a serious constitutional tool giving the National Treasury, or, in this context, the provincial treasury, the power to withhold funding from state bodies that repeatedly breach financial obligations.

Rodgers has warned that, unless municipalities curb unauthorised, irregular, fruitless, and wasteful expenditure by 31 August 2025, he will recommend invoking Section 216(2) to Finance Minister Enoch Godongwana.

The Community Angle

This isn’t just a fiscal crisis; it’s a threat to local services that citizens rely on, from road repairs to electricity. On social media, many residents say clamping down on delinquent municipalities is overdue. Still, others fret that freezing funds could further disrupt already fragile services.

Rodgers argues his move isn’t punitive; it’s about restoring accountability. He urges municipal councils to show leadership and clamp down on errant officials before it’s too late.

August Deadline or Fallout?

Municipalities now face a harsh reality: clean up your financial act or face a potential cut in your lifeline. With Rodgers setting an August 31 deadline, it’s clear the province is out of patience; accountability is not optional anymore.