North West Welcomes Release of Withheld Equitable Share Funds
The North West Provincial Government has welcomed the release of withheld Local Government Equitable Share allocations to affected municipalities, describing the decision as an important step toward restoring financial stability and protecting basic service delivery. According to SAnews, North West Finance MEC Kenetswe Mosenogi welcomed Finance Minister Enoch Godongwana’s decision to release the remaining withheld allocations from 31 July 2026, following earlier corrective action against municipalities that had failed to meet key financial management and compliance requirements.
The temporary withholding of funds affected 12 municipalities in the province and was implemented under Section 216(2) of the Constitution, read together with the relevant provisions of the Municipal Finance Management Act. Government said the intervention was not intended to punish communities, but to force stronger fiscal discipline, accountability and compliance within municipalities. The release of the funds now signals that several municipalities have made enough progress to meet the conditions set by National Treasury.
By the time the Minister announced the release of the remaining allocations, six of the 12 affected municipalities had already received their full equitable share. The remaining municipalities, including Madibeng, JB Marks, Matlosana, Mahikeng, Maquassi Hills and Dr Ruth Segomotsi Mompati, became eligible to receive their outstanding allocations from Friday. This development is especially important because equitable share funding supports municipalities in carrying out their constitutional responsibilities, including the delivery of basic services to residents.
Mosenogi said the provincial government recognises that the temporary withholding of funds was a corrective measure aimed at strengthening financial governance. She noted that some municipalities remained on the withholding list because of slow progress in addressing unauthorised, irregular, fruitless and wasteful expenditure, as well as weak consequence management. These issues are serious because they point to deeper governance problems that can weaken public trust, disrupt service delivery and place municipal finances under long-term pressure.
The MEC said deliberate support measures have been put in place to help municipalities comply with Treasury conditions and improve their financial management systems. Provincial Treasury has been working with affected municipalities to address unauthorised, irregular, fruitless and wasteful expenditure in line with applicable circulars. This support includes guidance on investigations, governance processes and the role of municipal councils, Municipal Public Accounts Committees and disciplinary boards in ensuring that consequence management is implemented properly.
The release of the funds is therefore not the end of the process, but part of a broader effort to rebuild municipal accountability. Mosenogi stressed that it is in the collective interest of government and communities to fix local government so that residents receive consistent and reliable basic services. This message reflects a wider national concern: municipalities cannot function effectively if financial controls are weak, if irregular expenditure is not investigated, or if those responsible for poor governance face no consequences.
Another key issue highlighted by Mosenogi is the unpaid municipal debt owed by government departments and public entities. These unpaid accounts continue to weaken municipal cash flow and limit the ability of municipalities to deliver services. Provincial Treasury has coordinated an intensive programme involving provincial departments, municipalities, public entities and other stakeholders to verify outstanding balances, reconcile disputed accounts, facilitate payment arrangements and improve the credibility of municipal financial information.
The province has already recorded progress in reducing government debt owed to municipalities. According to the June 2026 municipal debt reconciliation, the total amount owed by provincial departments to municipalities declined from R1.010 billion reported in the March 2026 Section 71 reports to R893.1 million. This represents a decrease of approximately R116.9 million, or 11.6%. While the reduction is encouraging, the remaining debt is still substantial and shows why tighter reconciliation, accurate billing and faster payment are essential for municipal recovery.
In line with the Minister’s directive, departments have been instructed to settle all undisputed municipal debt immediately, while payment arrangements must be finalised by the end of August 2026. Disputed accounts are expected to be resolved by September 2026. Mosenogi made it clear that government remains committed to paying legitimate municipal debt, but disputed invoices caused by inaccurate municipal billing systems will not be paid until they have been properly reconciled. This approach aims to protect municipalities from cash-flow collapse while also ensuring that public funds are not paid against unreliable accounts.
Provincial Treasury, working with Cooperative Governance, Human Settlements and Traditional Affairs and other stakeholders, will continue providing oversight and support to municipalities ahead of the December 2026 equitable share allocation. During August, Treasury and Cooperative Governance will embark on district-specific government debt reconciliation working sessions with all municipalities. These sessions are expected to help municipalities reconcile accounts with government departments and ensure that the conditions for future equitable share releases are met.
