South Africa's National Treasury has temporarily withheld R13.5 billion in equitable share transfers from 69 municipalities, citing poor performance and fiscal mismanagement.
The move marks a rare invocation of section 216(2) of the constitution, granting the national government direct oversight to intervene in local authority finances.
The decision targets municipalities that have failed to meet basic service delivery standards or maintain sound financial practices.
By freezing these funds, the Treasury aims to compel compliance with national fiscal frameworks and prevent further deterioration of local government balance sheets.
The affected entities now face immediate liquidity constraints, potentially disrupting essential services and municipal operations.
This intervention highlights the deepening crisis in South Africa's local government sector, where insolvency risks have been mounting for years.