Finance Minister Steps In to Get Money Owed to Towns

Why the Money Matters

Municipalities need cash to keep roads fixed, water running, and lights on. When government departments don’t pay their bills, towns struggle to deliver basic services.

The Scale of the Debt

Provincial and National Government Owe Billions

Finance Minister Enoch Godongwana said provincial departments owe about R14 billion and the national government owes roughly R8.2 billion. Together that’s R22 billion in unpaid rates and service charges for water, electricity, sanitation and other municipal services.

Long‑Standing Arrears

More than R8.5 billion of that debt has been overdue for over a year, putting extra pressure on already strained municipalities.

What the Minister Did

Invoking the Constitution

Godongwana announced that the National Treasury will use Section 216(2) of the Constitution. This provision allows the treasury to withhold a province’s equitable share (the money it normally receives from the national budget) if the province fails to meet its financial obligations.

Warning Letters Sent

Before taking action, Treasury Director‑General Duncan Pieterse wrote to the defaulting departments, warning that non‑payment would lead to direct deductions from their allocations.

Reaction from Politicians

DA Welcomes the Move

DA MP Dennis Ryder, a member of the Select Committee on Finance, praised the decision. He stressed that accountability in public finance must apply to everyone, not just ordinary citizens.

Ryder noted that recovering the owed money could give struggling towns immediate relief to maintain infrastructure and keep essential services running.

Call for Real Consequences

He warned that simply sending strongly‑worded letters isn’t enough—provinces that ignore their legal duties must face real financial consequences.

What Happens Next?

Withholding Funds

Provinces now have a chance to pay what they owe. If they don’t, the National Treasury will deduct the outstanding amounts from their equitable share transfers before the money reaches them.

Opportunity to Settle

The issue has been referred to the Select Committee on Finance for review, giving provinces a final window to clear their debts before any funds are held back.

Water Board Problems Too

Municipalities Struggle to Pay Water Boards

Separately, the debt that struggling municipalities owe to water boards has risen by almost R4 billion in the last ten months, reaching a total of R28 billion.

Minister Majodina’s Push

Water and Sanitation Minister Pemmy Majodina said municipalities often blame non‑payment on consumers, including government departments. She urged towns to follow the Treasury’s example and ask for deductions from the budgets of departments that owe them money.

Majodina added that her department has already submitted a list of nearly 16 municipalities that are not paying their water boards and will continue to use fund‑withholding as a last resort to secure payment.

Conclusion

Finance Minister Enoch Godongwana’s decision to tap into constitutional powers shows a stronger stance on making sure government departments pay their dues. By threatening to hold back provincial funds, the National Treasury aims to protect municipal budgets so that towns can keep providing essential services to their residents. If the provinces settle their debts, everyone benefits—towns get the money they need, and the cycle of unpaid bills can finally be broken.