The National Treasury has defended its decision to temporarily withhold R13.5-billion in July equitable share transfers from 69 municipalities, saying the freeze could last as little as one or two weeks if councils submit proper payment plans and proof that they are correcting financial management failures.

A follow-up briefing following the Treasury's announcement this week that it would withhold R13.5-billion in July equitable share transfers from 69 municipalities made clear that it is trying to walk a narrow line: force municipalities to pay Eskom, water boards, pension funds, SARS and the Auditor-General, without becoming the villain that residents blame when services fail.

The department's senior officials insisted the decision was not a punishment, but a last-resort compliance measure under section 216(2) of the Constitution. This follows the Treasury's statement on Monday, 6 July 2026, that the affected municipalities had persistently failed to comply with the Municipal Finance Management Act, despite repeated support, circulars, training and direct engagements.

Read more Treasury turns off the tap for 69 SA municipalities over rotten money management July 7, 2026 "With regards to how much, we've only withheld R13.5-billion, and you can imagine obviously the overall equitable share of municipalities is for this new financial year R110-billion," Ogalaletseng Gaarekwe, the Treasury's deputy director-general of intergovernmental relations, told journalists.

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The money was due to flow on Wednesday, 8 July. The Treasury said the next equitable share transfers were scheduled for December and March.

Gaarekwe clarified that the Treasury was...