National Treasury has temporarily held back billions of rand from two Eastern Cape metro municipalities because of poor financial management and failure to follow laws.
The department announced on Tuesday that it is withholding the July equitable share transfers for Nelson Mandela Bay and Buffalo City, along with payments to 68 other municipalities nationwide. The move is meant to force better fiscal discipline and ensure public money is managed properly.
Nelson Mandela Bay was due to receive R1.74 billion for the 2026/27 financial year, while Buffalo City was allocated R1.29 billion. These equitable share funds pay for free basic services such as electricity, water and sanitation for qualifying households in the metros.
Treasury said the July payments are being held to “instill fiscal discipline and ensure that public money is properly managed”.
The decision follows mounting criticism of Nelson Mandela Bay over poor service delivery. Parliament has also been scrutinising the metro for its governance failures.
The Democratic Alliance will bring national leaders to the metro this week to highlight crime and safety problems. DA Eastern Cape leader Andrew Whitfield said: “The entire DA national leadership will be descending on Nelson Mandela Bay and we need you to hold hands with us as we march against violent crime in our city.”
Treasury is also withholding funds from several other Eastern Cape municipalities, including Makana, Sundays River Valley, Inxuba Yethemba and Port St Johns.