KUGOMPO CITY, Eastern Cape — Efforts to stabilize Eastern Cape municipal finances are currently being undermined by coalition infighting, according to Premier Oscar Mabuyane, as the province grapples with the National Treasury’s decision to withhold the July 2026 equitable share. Addressing the media following a provincial local government accountability session, leaders emphasized that political indiscipline and persistent non-compliance with the Municipal Finance Management Act are severely hampering fiscal recovery and service delivery across the region.
During the session, Mabuyane warned that the inaccessibility of these crucial equitable share funds could have a devastating impact on residents if the matter is not dealt with proactively. A major focal point of the crisis has been the failure to implement consequence management for those responsible for the mismanagement of municipal funds. However, corrective steps are reportedly underway, with disciplinary actions already initiated against 100 employees in one of the six affected municipalities in the province.
Highlighting the root causes of the administrative bottlenecks, the Premier pointed to political indiscipline as a primary disruptor of council functions. He stressed the critical need for municipalities to meet deadlines, convene scheduled meetings on time, and ensure that municipal public accounts committees work cohesively. These functional committees are essential to strengthen oversight and ensure that every transgressor is held strictly accountable.
While the provincial government has welcomed the National Treasury’s firm stance on enforcing compliance, officials caution that a prolonged withholding of funds will inevitably trigger severe cash flow and service delivery challenges. Eastern Cape CoGTA MEC Zolile Williams noted that municipalities are heavily dependent on self-generated revenue, which is currently compromised because residents, government departments, and businesses owe large sums of money to these same six municipalities.
Williams specifically highlighted that the Makana Local Municipality, alongside others in the affected group, will definitely confront acute cash flow challenges without its equitable share from the national fiscus. This financial strain directly exacerbates the daily service delivery challenges the province is already working to resolve.
Despite these systemic hurdles, the provincial government announced a positive development in the push for fiscal compliance. The Buffalo City Metro and Port St. John’s municipalities have successfully submitted their action plans to the National Treasury. Having fully complied with the necessary requirements, both municipalities are expected to soon have their withdrawn allocations restored, offering a potential blueprint for the remaining affected regions to follow.
