South Africa’s (SA) National Treasury will withhold funding from Johannesburg and dozens of other municipalities for at least a month over persistent and serious non-compliance with financial management regulations, officials said on Wednesday.
The move comes before local elections on November 4, in which Johannesburg, SA’s economic hub and largest municipality, is expected to be among the most hotly contested battlegrounds.
Ogalaletseng Gaarekwe, Treasury’s Deputy Director General of intergovernmental relations, told a news conference on Wednesday that $220 million in funding would be withheld from Johannesburg in July.
She stressed the move did not amount to placing the city under administration.
Around 69 municipalities will have a portion of their funding suspended until September unless they can show they have reduced wasteful expenditure by at least 25%, Treasury officials said.
Finance Minister Enoch Godongwana has repeatedly raised concerns about Johannesburg’s financial management.
In May, the city approved a $5.98 billion budget that Treasury said was unfunded because planned spending exceeded realistic revenue projections and included a sharp increase in the municipal wage bill.
–Reuters–
