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FFC says Treasury ignored differences between distressed municipalities

Published

The Financial and Fiscal Commission told Parliament's finance committees on Tuesday that the Medium-Term Budget Policy Statement paid too little attention to the sustainability of the local government fiscal framework. It said more work is needed on a collaborative approach.

The commission said Treasury's approach did not account for the varying fiscal positions and institutional capacities of distressed municipalities. It was also critical of Treasury's decision in July to withhold money from 69 municipalities that failed to settle debts.

FFC deputy chairperson Malijeng Ngqaleni said the current approaches to fixing municipal finances are fragmented and need to be consolidated. She said proposed amendments to the Municipal Finance Management Act will improve how municipal officials respond to interventions.

Ngqaleni told the committees: "What you will see is that the intervention teams are there [but] municipalities, if they like, they can ignore you because they still hold the power and authority." Finance Minister Enoch Godongwana announced the amendments to municipal finance legislation last week.

Key facts

Who
Financial and Fiscal Commission (government finance watchdog that criticised Treasury); Malijeng Ngqaleni (FFC deputy chairperson); Enoch Godongwana (Minister of Finance, announced amendments to municipal finance legislation…); National Treasury (department criticised by the FFC for its approach to distressed municipalities)
What
The FFC told Parliament's finance committees on Tuesday that Treasury's approach to distressed municipalities did not account for their varying fiscal positions and institutional capacities, and that more work is needed on a collaborative approach. The FFC was previously critical of Treasury's decision in July to withhold money from 69 municipalities failing to settle debts.
When
27 October 2026
Where
South Africa
Status
Reported

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