· Municipalities failed to pay pension funds, submit budgets and fix irregular spending — now Treasury has pulled their equitable share payments.

· The funding freeze could stop salary payments and basic services, deepening the crisis in already struggling towns.

The National Treasury has frozen payments to 15 municipalities in the North West province that failed to meet basic financial requirements.

In a circular dated 9 December 2025, Treasury said it was stopping scheduled equitable share payments to the affected municipalities under Section 216 of the Constitution.

This section gives Treasury the power to halt funding to any government body that commits a “serious or persistent material breach” of financial controls. This includes failure to submit funded budgets, make payments to the South African Revenue Service (Sars), or contribute to pension funds.

In the circular several ongoing failures by the municipalities have been listed, including not submitting budget funding plans, not addressing irregular or wasteful expenditure, and failing to honour payment agreements.

The South African Local Government Association (Salga) also raised concerns. It said some municipalities failed to prove they were complying with agreements for pension fund payments and Sars obligations.

While most cases were in the North West, a few smaller municipalities in the Free State, Gauteng, Eastern Cape, Limpopo, Mpumalanga and the Northern Cape were also included in the enforcement list.

About 80 letters were issued to municipalities across the country that still owe money to water boards.

The decision to stop funding could have serious consequences. It may affect salary payments, delivery of basic services and support to poor households, pushing some of these municipalities even deeper into financial and service delivery collapse.

Pictured above: one of the struggling municipalities in the North West

Image source: supplied