The Executive Mayor of the Mopani District Municipality, Councillor Pule Shayi.
In a dramatic move to prevent the collapse of essential public services, National Treasury has agreed to release R7.1 billion in withheld funding to struggling local councils across the country.
The decision, announced on Tuesday, July 28, 2026, brings temporary relief to the Mopani District Municipality, which was rapidly heading toward a financial disaster that threatened to leave its workforce unpaid by August.
Finance Minister Enoch Godongwana and Cooperative Governance and Traditional Affairs (COGTA) Minister Velenkosini Hlabisa confirmed during a joint media briefing that the frozen funds will be released starting Friday, July 31, 2026. The step comes right at the deadline of a 30-day statutory withholding period that began in early July when Treasury froze allocations for 69 non-compliant municipalities across all nine provinces.
For Mopani District Municipality, the relief could not have come at a more crucial moment. While neighboring Fetakgomo-Tubatse Local Municipality quickly corrected its paperwork and complied with government spending rules to unfreeze its funds earlier, Mopani remained trapped in the freeze zone.
Mopani managed to pay its employees their regular July salaries on time, but local leaders and union representatives warned that the council’s bank accounts were running on empty. Without the release of the equitable share allocation, Mopani faced the very real possibility of failing to pay staff salaries, pension contributions, and medical aid deductions in August.
National Treasury emphasized that the decision to release the remaining R7.1 billion of the original R13.5 billion frozen pool is not a sign that Mopani or other affected councils have cleaned up their act. Instead, government leaders acted to protect poor households and ordinary citizens from bearing the immediate brunt of local governance failures.
“I wish to make it clear that the decision to release the remaining transfers does not mean that the affected municipalities have satisfied the requirements of the Municipal Finance Management Act (MFMA),” Minister Godongwana warned during the briefing. “National Treasury must balance its constitutional responsibility to enforce financial management requirements with the need to avoid communities carrying the immediate consequences of failures by municipal institutions and officials.”
The temporary freeze was originally triggered by widespread non-compliance across local government. Officials had adopted unfunded budgets, allowed unauthorized, irregular, fruitless, and wasteful expenditure to surge, and failed to settle massive debts owed to Eskom, regional water boards, the South African Revenue Service, and municipal pension funds. Mopani itself carries a staggering R1.35 billion in irregular expenditure and owes hundreds of millions of rands to bulk water suppliers like Lepelle Northern Water.
Treasury made it clear that Mopani and the other 48 municipalities receiving their funds this Friday are “not off the hook”. Godongwana announced a strict, structured compliance program that will monitor Mopani’s every move over the next few months.
Under the new conditions set by the national government, affected municipalities must submit detailed quarterly reports and show real progress in investigating and reducing illegal spending. By October 31, 2026, Mopani must prove it is processing outstanding financial misconduct cases through formal legal channels. By November 30, 2026, the district must show that corrupt officials and managers are facing actual disciplinary, recovery, and criminal proceedings.
National Treasury warned that if Mopani fails to demonstrate clear improvements and consequence management during these evaluations, the government will not hesitate to freeze the next equitable share payment scheduled for December 2026. Letters outlining these conditions are being sent directly to provincial Premiers and provincial MECs for Finance and COGTA.
COGTA Minister Velenkosini Hlabisa also fired a strong warning shot at municipal leaders regarding reckless budgeting practices ahead of the upcoming local government elections.
“Unfunded budgets must come to an end,” Hlabisa declared, insisting that councils must only spend money they actually have. He warned political leaders not to leave newly elected councils with bankrupt administrations when voters go to the polls.
While the immediate threat of unpaid wages and interrupted water services has been paused for Mopani workers and residents, the clock is ticking. The newly appointed Chief Financial Officer, Mojela Jimmy, and the district executive now face a strict deadline until September 30 to prove they can run a clean, accountable administration—or face an even harsher financial shutdown at the end of the year.