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The Nelson Mandela Bay municipality will have to wait a little longer to see if the National Treasury will release its equitable share allocation.
This comes after Eastern Cape premier Oscar Mabuyane announced on Tuesday that the province’s other metro, Buffalo City, had been given the green light by the National Treasury to access its R1.29bn equitable share allocation.
Earlier this month, the Treasury announced it would be withholding grants for 69 municipalities across the country, including Nelson Mandela Bay, Buffalo City, Makana, Port St Johns, Sundays River Valley and Inxuba Yethemba, for their failures in dealing with persistent unauthorised, irregular, fruitless and wasteful expenditure (UIFWE).
The Bay metro has the highest case of UIFWE in the country, exceeding R28bn.
The city’s equitable share allocation for the 2026/2027 financial year is R1.7bn.
However, it is unclear what the first tranche will be.
On Tuesday, Mabuyane convened a special local government accountability day session with municipalities affected by the funding freeze at the East London Industrial Development Zone (ELIDZ).
He said the session was to develop a coherent approach by the affected municipalities in the province to secure the withheld equitable transfers.
“I must indicate that the decision by the National Treasury is taken very seriously by the provincial government, as to us, this development has the potential to place additional strain on already constrained municipal finances.
“It may in the long run impact the delivery of essential services to our communities if urgent corrective measures are not undertaken by the collective leadership of the province.
“As the provincial government, we cannot allow a situation where our people bear the consequences of governance and compliance shortcomings through disruptions in basic service delivery,” he said.
The equitable share helps municipalities fund basic services for poor households and support administrative costs.
The Treasury said it withheld the funds after the municipalities repeatedly failed to comply with the Municipal Finance Management Act despite receiving guidance, support and multiple warnings.
The municipalities were given written notice, urged to improve their financial management and afforded an opportunity to explain why their funds should not be withheld before the decision was made.
Speaking after the session, co-operative governance and traditional affairs MEC Zolile Williams said the Bay provided proof that it had submitted all relevant documents required by the Treasury.
“I’ve got copies of the information NMB provided and clearly they handled things on their side and they proved they’ve submitted. Clearly they will be handled.
“BCM and Port St Johns submitted and National Treasury has accepted their documents and soon their status may be changed.
“National Treasury will still look at what Nelson Mandela Bay has submitted.
“Municipalities have until [the end of] July for Treasury to review their submissions,” Williams said.
Speaking on the sidelines of the meeting, Bay mayor Babalwa Lobishe welcomed Mabuyane’s intervention, saying it was intended to protect residents from the consequences of governance failures.
“The intervention he has been trying to make is making sure that our citizens do not suffer.
“As Nelson Mandela Bay, we submitted both in December and again on June 26 to Treasury our responses relating to how we are going to lessen the UIFWE.
“We have also taken to council 10 issues that would assist in the management and controls of dealing with UIFWE.
“So, we are of the view that with all these actions there are going to be tangible outcomes.” — Additional reporting Daily Dispatch
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