Godongwana defends municipal funding, warns of tough reforms ahead

Speaking to SABC News, Godongwana said National Treasury had released between R7.5 billion and R7.9 billion in equitable share allocations to municipalities as scheduled.

The equitable share is a constitutionally mandated allocation aimed at helping municipalities provide basic services such as water, electricity, sanitation and refuse removal. However, many municipalities continue to face financial distress due to declining revenue collection, rising debt and ongoing governance challenges.

NO DISPUTE WITH MAJOR METROS

Godongwana said there was alignment between National Treasury and major metros, including the City of Johannesburg and City of Tshwane, on the scale of the financial challenges.

"There are no divergent views between ourselves and those two municipalities. What they acknowledge is that some of the issues we are raising are correct. The issue may be, how do we work together to make sure that the correction is made?"

He added that Treasury may deploy technical expertise to assist municipalities in resolving financial management issues and strengthening internal capacity.

CALL FOR 'PAINFULL'RESTRUCTURING

The Minister warned that stabilising municipal finances would require difficult and potentially unpopular decisions, particularly as personnel costs continue to place pressure on budgets.

"If you go to any municipality, you will find that in most cases, the things that are cost drivers are electricity, water, and personnel. Because in some instances, personnel is growing, then it begins to crowd out even these ones. So in some circumstances, you will have to have the painful exercise of restructuring the municipality in order to achieve that objective."

Many municipalities spend a significant portion of their budgets on salaries, limiting their ability to invest in infrastructure and maintain service delivery.

JOHANNESBURG'S BUDGET UNDER PRESSURE

Godongwana singled out Johannesburg as an example of budget imbalance, noting that infrastructure spending was relatively low compared to other metros.

"If you take Johannesburg and compare it to others, just infrastructure budget, despite the fact that Johannesburg is the biggest of all the municipalities in terms of budget, in terms of the capital budget, they sit at about 7 to 8 billion. Compared to others, the highest are about 15, others are about 12 and so on."

The city has faced mounting criticism over deteriorating infrastructure, including potholes, broken traffic lights and aging bridges, many of which require urgent maintenance.

TOO MANY ENTITIES, TOO LITTLE DELIVERY

The Minister also raised concerns about the number of municipal entities operating in Johannesburg, suggesting that they may be contributing to inefficiencies.

"For instance, they’ve got about 14 entities, highly paid individuals in the form of 14 entities. Now, in an environment where you can’t fix potholes, in some instances it’s a different thing."

Municipal entities are designed to manage specific services, but critics argue that an excessive number of entities can lead to duplication of roles, high administrative costs and reduced accountability.

ACCOUNTABILITY AND OVERSIGHT

Godongwana emphasised that National Treasury was working closely with the Auditor-General of South Africa to ensure accountability and enforce financial discipline.

"My work has got to complement the work of the Auditor-General. That’s a constitutional requirement. That’s what the PFMA [Public Finance Management Act] requires. That’s what the Municipal Finance Management Act requires. So the entire regulatory framework requires me to work and support the findings of the Auditor General."

He added that Treasury attached conditions to funding allocations to ensure municipalities address issues flagged in audit reports, including irregular, wasteful and unauthorised expenditure.

BEYOND POLITICS

While political instability has often been cited as a key factor behind municipal failures, Godongwana said the challenges are more complex and require deeper institutional reform.

"The problem is, everybody was campaigning in Johannesburg. I’ve had a taste of Johannesburg. Whether you talk about the DA, they’ve got about three mayors, as you know. The question is, what is new? Because they have governed Johannesburg in the past. All of us have governed Johannesburg. You can’t simply blame one political party in Johannesburg."

He stressed that long-term solutions must focus not only on political leadership, but also on administrative systems and institutional capacity.

Godongwana said ongoing efforts to review the local government framework aim to address both financial and structural weaknesses in municipalities.

"What we need to do is we must also go to the structure and the administration, not only look at the political leadership of the municipality."

He emphasised that while funding support remains important, sustainable improvement will depend on better governance, stronger financial management and meaningful structural reform.

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