By KEDIBONE MOLAETSI
17 December 2025- The South African Local Government Association (SALGA) said it has formally written to the National Treasury regarding concerns about the process followed in withholding the Local Government Equitable Share (LGES) tranche for December 2025. SALGA said this action has had direct implications for 75 municipalities across the country.
SALGA spokesperson, Motalatale Modiba said since September 2025, the National Treasury issued two circulars outlining its intention to invoke Section 216 (2) of the Constitution and Section 38 of the Municipal Finance Management Act 56 of 2003. Modiba said these measures permitted the withdrawal of the LGES, which supports critical municipal functions.
“In response, SALGA made multiple attempts to engage with National Treasury to prevent the risk of withholding and to ensure that affected municipalities could comply with legislative requirements before the scheduled payment of the December tranche.
“Despite SALGA’s repeated efforts, the National Treasury did not provide the necessary cooperation. This hindered SALGA’s ability to help municipalities address compliance issues and avoid the withholding of funds. SALGA continues to emphasise the necessity for municipalities to adhere to all relevant legislation and remains committed to supporting local governments in fulfilling their legislative obligations,” he said.
Modiba further said SALGA has identified significant shortcomings in the process undertaken by the National Treasury. He added that notably, there was a lack of consistency in communications with the affected municipalities.
“Treasury’s correspondence was often unclear regarding the specific information or documentation required to rectify identified non-compliances.
“Furthermore, in several cases, deadlines for submission were not adequately communicated, leaving municipalities uncertain about the timeframes for compliance,” said Modiba.
She said in instances where municipalities did submit responses to National Treasury, no feedback was provided on the adequacy of their submissions until the actual date of the withholding of the LGES tranche. Modiba said SALGA has called on the National Treasury to immediately release the LGES tranche for all municipalities that have adequately responded and complied with the requirements.
“In addition, SALGA advocates for the establishment of a formal, transparent, and time-bound process within the Division of Revenue Bill (DORA) for the withholding of equitable share allocations.
“SALGA also recommends that structural engagements be facilitated through Intergovernmental Relations (IGR) platforms to improve coordination and oversight,” she said.
Modiba said the association urges National Treasury to apply Section 216 (2) and Section 6 (2) (f) of the Public Management Finance Act consistently, not only to municipalities, but also to government departments and entities that owe municipalities or are non-compliant with the unauthorised, irregular, fruitless and wasteful expenditure (UIFW) regulations. He said this approach is essential to uphold fairness and accountability across all spheres of government.
“SALGA will continue to liaise with the National Treasury to clarify any outstanding requirements for impacted municipalities.
“The goal is to ensure the timely release of the outstanding Local Government Equitable Share tranche and to safeguard service delivery at the local government level,” said Modiba.
Meanwhile, the African People’s Convention (APC) in North West said it has noted with serious concern the decision by National Treasury to freeze equitable share funding to 15 municipalities in the North West due to repeated failures to comply with financial management and accountability requirements.
APC provincial chairperson, Dikobe Lucas Mphaka said according to Treasury, this drastic intervention—taken in terms of Section 216 of the Constitution—follows persistent non-compliance, including unpaid debts to SARS, pension funds and water boards, failure to submit council-approved funded budgets, and continued irregular, fruitless and wasteful expenditure.
Mphaka said the affected municipalities include Matlosana, JB Marks, Naledi, Maquassi Hills, Mamusa, Lekwa-Teemane, Kgetlengrivier, Madibeng, Rustenburg, Moses Kotane, Moretele, Tswaing, Bojanala Platinum District, Ngaka Modiri Molema District and Dr Ruth Segomotsi Mompati District.
“As the APC, we wish to place it on record that while we support decisive action against corruption, mismanagement and financial recklessness, we are deeply worried about the direct impact this decision will have on ordinary communities.
“Equitable share funding is meant to ensure the delivery of basic services, payment of municipal workers, and support for indigent households. Freezing these funds, without urgent corrective support and oversight, risks further collapsing already fragile municipalities and punishing communities for failures they did not cause,” he said.
The Guardian 