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IOL News
7 days ago
- Business
- IOL News
Godongwana withholds grants from municipalities owing water boards
Minister of Finance, Enoch Godongwana Image: Phando Jikelo/ Parliament of SA Finance Minister Enoch Godongwana has informed his Cooperative Governance and Traditional Affairs counterpart, Velenkosini Hlabisa, that he intends to withhold millions of rand in grants to several municipalities due to their persistent failure to settle billions in debt. The 39 municipalities are in the Free State, Gauteng, Mpumalanga, Northern Cape, North West, and Limpopo. According to Godongwana, 18 defaulting municipalities owe the highest amounts to the four water boards facing imminent bankruptcy. In total, the 18 municipalities owe Vaal Central, Magalies Water, Lepelle Northern Water, and Rand Water nearly R18 billion. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Matjhabeng Local Municipality in the Free State owes Vaal Central over R8.13bn. Kopanong and Mafube local municipalities, both in the Free State, were R330 million and R253.4m, respectively, in arrears for pension fund contributions. Rand Water, Vaal Central, Lepelle Northern, and Magalies Water have been advised to enforce their credit control policies to also attach the bank accounts of defaulting municipalities to ensure a change in their behaviour. Godongwana said pension funds were also owed about R820 million by 18 municipalities, while the Auditor-General South Africa's (AGSA) debt stands at R68.4m across six municipalities. He told Hlabisa on June 30 that SARS' outstanding debt was R197.5m across eight municipalities. 'This letter serves as a consultative mechanism with you in terms of section 38(2)(c) of the Municipal Finance Management Act (MFMA) with regard to the intention of the National Treasury to invoke section 216(2) of the Constitution by stopping the transfer of the July 7, 2025 tranche of the equitable share and all the grants to be transferred to the 39 municipalities,' stated Godongwana. The Constitution provides that the National Treasury must enforce compliance with the established measures and may stop the transfer of funds to an organ of state if that organ of state commits a serious or persistent material breach of those measures. Additionally, the MFMA requires the National Treasury to consult the Cabinet member responsible for the national department making the transfer. Godongwana cited persistent failure by the 39 municipalities to pay water boards and/or third parties like pension funds, medical aids, SARS, and the AGSA, and/or adopting unfunded budgets for the invocation of the Constitution. Stringent conditions have been set for each of the municipalities, including forcing them to provide proof that it has fully paid the outstanding amounts owed to the respective water boards, or else the local government's equitable share of that municipality will be stopped and will only be released to the municipality in portions with conditions. 'The conditions describe that the first amount of the withheld equitable share is to be released and strictly used to pay the water boards' current accounts and provide evidence to the National Treasury in the form of a proof of payment. 'Should this condition be met, then the second amount of the equitable share will be released and strictly used to honour any arrears owed in terms of a valid repayment arrangement with the water board and provide evidence to the National Treasury in the form of a proof of payment,' the finance minister warned. Godongwana said if the conditions are met, then the July 2025 tranche of the equitable share will be released under specified conditions until such time that all outstanding water board debt has been resolved. The National Treasury has also indicated that if both conditions are not met or municipalities fail to submit the evidence that SARS, pension funds, and other relevant statutory third parties have been paid, it will approach Parliament to endorse that its decision to stop the transfer of all the equitable share due to the municipality over the remainder of the 2025/26 financial year (June 30, 2026) for the municipality's persistent failure. Godongwana said a similar approach will be followed for the municipalities that persist with unfunded budgets. 'All 39 municipalities will be required to provide evidence that SARS, pension, and other staff benefits deducted from salaries of municipal officials have been paid over to the appropriate institution within the prescribed period,' he added.
IOL News
08-07-2025
- Business
- IOL News
Finance minister to withhold grants from municipalities over unpaid billions
Finance Minister Enoch Godongwana is threatening to withhold millions of rand in equitable share and grants to be transferred to the 39 municipalities over billions of rand they owe. Image: Elmond Jiyane / GCIS Finance Minister Enoch Godongwana has informed his Cooperative Governance and Traditional Affairs counterpart, Velenkosini Hlabisa, that he intends to withhold millions of rand in grants to several municipalities due to their persistent failure to settle billions in debt. The 39 municipalities are in the Free State, Gauteng, Mpumalanga, Northern Cape, North West, and Limpopo. According to Godongwana, 18 defaulting municipalities owe the highest amounts to the four water boards facing imminent bankruptcy. In total, the 18 municipalities owe Vaal Central, Magalies Water, Lepelle Northern Water, and Rand Water nearly R18 billion. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Matjhabeng Local Municipality in the Free State owes Vaal Central over R8.13bn. Kopanong and Mafube local municipalities, both in the Free State, were R330 million and R253.4m, respectively, in arrears for pension fund contributions. Rand Water, Vaal Central, Lepelle Northern, and Magalies Water have been advised to enforce their credit control policies to also attach the bank accounts of defaulting municipalities to ensure a change in their behaviour. Godongwana said pension funds were also owed about R820 million by 18 municipalities, while the Auditor-General South Africa's (AGSA's) debt stands at R68.4m across six municipalities. He told Hlabisa on June 30 that SARS' outstanding debt was R197.5m across eight municipalities. 'This letter serves as a consultative mechanism with you in terms of section 38(2)(c) of the Municipal Finance Management Act (MFMA) with regard to the intention of the National Treasury to invoke section 216(2) of the Constitution by stopping the transfer of the July 7, 2025 tranche of the equitable share and all the grants to be transferred to the 39 municipalities,' stated Godongwana. The Constitution provides that the National Treasury must enforce compliance with the established measures and may stop the transfer of funds to an organ of state if that organ of state commits a serious or persistent material breach of those measures. Additionally, the MFMA requires the National Treasury to consult the Cabinet member responsible for the national department making the transfer. Godongwana cited persistent failure by the 39 municipalities to pay water boards and/or third parties like pension funds, medical aids, SARS, and the AGSA, and/or adopting unfunded budgets for the invocation of the Constitution. Stringent conditions have been set for each of the municipalities, including forcing them to provide proof that it has fully paid the outstanding amounts owed to the respective water boards, or else the local government's equitable share of that municipality will be stopped and will only be released to the municipality in portions with conditions. 'The conditions describe that the first amount of the withheld equitable share is to be released and strictly used to pay the water boards' current accounts and provide evidence to the National Treasury in the form of a proof of payment. 'Should this condition be met, then the second amount of the equitable share will be released and strictly used to honour any arrears owed in terms of a valid repayment arrangement with the water board and provide evidence to the National Treasury in the form of a proof of payment,' the finance minister warned. Godongwana said if the conditions are met, then the July 2025 tranche of the equitable share will be released under specified conditions until such time that all outstanding water board debt has been resolved. The National Treasury has also indicated that if both conditions are not met or municipalities fail to submit the evidence that SARS, pension funds, and other relevant statutory third parties have been paid, it will approach Parliament to endorse that its decision to stop the transfer of all the equitable share due to the municipality over the remainder of the 2025/26 financial year (June 30, 2026) for the municipality's persistent failure. Godongwana said a similar approach will be followed for the municipalities that persist with unfunded budgets. 'All 39 municipalities will be required to provide evidence that SARS, pension, and other staff benefits deducted from salaries of municipal officials have been paid over to the appropriate institution within the prescribed period,' he added.
eNCA
12-05-2025
- Politics
- eNCA
Are you drowning in escalating municipal bills?
JOHANNESBURG - Municipal billing has been a headache for decades. Residents in many parts of the country often complain about incorrect bills, either charged for things they didn't use or receiving inflated invoices bills they don't understand. This leads to frustration and lack of trust in the system, and some end up refusing to pay the bills either because they cannot afford them or they feel they are paying for services they do not get. Because of this, municipalities find themselves trapped in debt because of their poor revenue collection models, leaving them unable to provide basic services. One example is water. In November 2024, the Portfolio Committee on Water and Sanitation revealed that Vaal Central and Magalies Water face bankruptcy due to R23.7 billion in municipal debt. Then there is the long running saga of power cuts. In February 2025, SCOPA announced that municipalities owe Eskom R94 billion. This is a vicious cycle that hurts both residents and municipalities. With more people complaining about their ballooning municipal bills, eNCA asked its viewers if they were drowning in escalating municipal bills. This opened a floodgate of reactions with many voicing their frustrations. One user on X Gabonewe Setshedi says rising municipal bills are unbearable, particularly for water and electricity services. "These combined prices have increased significantly in my area and many parts of Tshwane. It's a significant concern for me." Sharing the same sentiments is Ketlareng Sybil Matlhako who noted the challenge in the billing system. "It's not possible to get a bill of water at R12 000 each month. The municipal bills have an impact on the ability of citizens to balance the already rising cost of living." One user says they simply do not have money to pay for services they do not receive. Carl Taylor on Facebook says this continued payment for services not rendered must be illegal and against the constitution. Taylor's sentiments were also echoed by Shirley van Son, describes Tshwane as a slum with burst water pipes, raw sewage running down the roads, street lights that don't work, overgrown verges and pavements taken over by weeds. Now Centurion is dealing with sinkholes. "One gets references but nothing gets done to fix the problem. Paying for services we don't get," she said. On eNCA's SA Morning Soapbox, reporters took to the streets of Cape Town and Johannesburg to give residents a chance to weigh in on the topic. Many say the increasing cost of electricity, water, and property as well as rates and taxes, have added to their burden, forcing them into creative ways of budgeting to make ends meet.
